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MARKET BRIEF
MARKET BRIEF
20242024
State of Sustainable Fleets 2024 Market Brief
the Market Brief each year. Additionally, TRC
produces a Policy and Funding Trend Brief on
the previous year’s most important regulatory
and public incentive developments each year.
Trend Briefs on other topics are also produced as
needed. Finally, regular eet education webinars
and email round out the portfolio of ongoing
education and updates on this rapidly changing
marketplace.
All previous Market Briefs, Fleet Miniguides, Trend
Briefs, and webinars are publicly available at:
https://www.stateofsustainableeets.com.
Related Material
State of Sustainable Fleets produces an
annual evaluation of the clean commercial
transportation market. Now in its fth year,
the annual Market Brief provides readers
with historic data and analysis on leading
sustainable technologies for eets and signicant
developments from the past year on the markets
for these technologies.
TRC produces a short “Fleet Miniguide” on
planning to adopt each of the four drivetrains
(propane, natural gas vehicles, battery-electric
vehicles, and hydrogen vehicles) and renewable
fuels for diesel vehicles updated with data from
AUTHORSHIP AND USES
This assessment was prepared by TRC Companies, Inc. (TRC), a global environmental consulting and
energy engineering rm providing services to the energy, environment, and infrastructure industries for 60
years. The opinions and analysis expressed herein are those of the authors and do not necessarily reect
the views of project sponsors. Reference herein to any 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 TRC. No part of this work shall be used
or reproduced by any means, electronic or mechanical, without rst receiving the express written
permission of TRC.
Suggested citation: TRC Companies, Inc. (TRC), “State of Sustainable Fleets 2024 Market Brief”, May 2024,
Santa Monica, CA. Available at: https://www.stateofsustainableeets.com.
State of Sustainable Fleets 2024 Market Brief
Emma Frantz, Program Manager, Policy &
Funding Services (Researcher, Co-Author of
Policy and Funding Chapter)
Nathan Hart, Senior Program Manager, Programs
(Co-Author of Policy and Funding Chapter)
Tiara Brown, Senior Technical Associate,
Technical Services (Researcher)
Anna Curtis, Technical Associate, Technical
Services (Researcher)
Stephane Babcock, Director of Editorial and
Partnership Marketing, Creative Services (Editor)
Nate Springer, Vice President, Market
Development (Project Lead / Author / Editor)
Eleanor Johnstone, Senior Project Manager,
Technical Services (Project Manager / Lead
Researcher / Lead Author)
Jonah Berg-Ganzarain, Strategic
Communications Manager, Creative Services
(Project Manager / Market Education / Media
Relations)
Rodger Lueras, Art Director, Creative Services
(Lead Designer)
Kristina Ishchenko, Senior Digital Campaign
Manager, Creative Services (Marketing
Manager)
Acknowledgements
Preparation of this assessment was performed with sponsorship support by Penske Transportation
Solutions, Volvo Trucks North America, Chevron Corporation, S&P Global Mobility, Exelon Corporation,
and Dana. TRC gratefully acknowledges the essential support of, and content contributions from, these
organizations.
Authors, Designers, and Market Education Leads:
Individuals from many organizations provided important inputs for this report, and/or generally assisted
with the research. These organizations included but were not limited to, Engine Technology Forum (ETF),
Cummins, Inc., Propane Education and Research Council (PERC), The Transport Project, Edison Electric
Institute (EEI), California Hydrogen Business Council (CHBC).
State of Sustainable Fleets 2024 Market Brief
78
Methodology
77
Glossary
76
Conclusion
63
Hydrogen Vehicles
47
Battery-Electric
Vehicles
37
Natural Gas
Vehicles
30
Propane Vehicles
20
Diesel Vehicles
11
Federal, State, and
Local Policy and
Funding
03
Introduction and
Key Findings
01
About the 5th
Anniversary
Market Brief
TABLE OF CONTENTS
State of Sustainable Fleets 2024 Market Brief 1
ABOUT THE 5TH ANNIVERSARY
MARKET BRIEF
The 2024 Market Brief is the fth annual technology-neutral analysis of key insights and critical trends for
today’s leading on-road clean vehicle technologies produced by State of Sustainable Fleets. Building
on ve years of market reporting and more than 30 years of TRC’s industry leadership, the 2024 edition
provides concise insights on key trends and developments in the vehicle, fuel, and infrastructure
segments of clean commercial transportation.
By gathering real-world data directly from early adopter eets, the State of Sustainable Fleets
provides sector-specic insights into the adoption of four leading clean medium- and heavy- duty
vehicle technologies – drivetrains powered with propane, compressed natural gas, electric batteries,
and hydrogen – and renewable fuels and electricity against a baseline of diesel technology. The
comprehensive ndings within this document represent government and private sector eets and are
gathered across several sectors including school, shuttle, state/county/municipal, urban delivery, refuse,
utility, transit, regional-haul, long-haul, drayage, and off-road cargo handling.
real-world eets in every stage of technology
adoption ensures that this Brief provides a
comprehensive representation of today’s eet
landscape.
About the 2024 Fleet Survey
At its core, the 2024 Market Brief is informed by
a robust eet survey capturing input on clean
vehicles and infrastructure from nearly 200 eet
operators and decision-makers. Building upon
a rich data source covering a broad range of
State of Sustainable Fleets 2024 Market Brief 2
Using the Findings
The Market Brief is a guide for eet operators
and the industry as it navigates a time of
unprecedented change. Developments in the
vehicle and fuel markets are occurring so rapidly
that an exact assessment is impossible. Each
year, the survey results are complemented by
secondary data and input from the industry’s
leading experts (see Methodology). This
methodology yields the most comprehensive
and robust reection of the industry available
today, supporting – but not substituting for – the
custom evaluations that eet owners must do to
identify the best-t solution for their business.
The State of Sustainable Fleets produces
additional eet and industry education
materials regularly, including concise Fleet
Miniguides on each of the leading sustainable
technologies covered in the Market Brief, Trend
Briefs on important developments affecting
eet adoption of clean technologies, such as
new regulation or GHG emissions planning,
and regular educational webinars and email
campaigns. All of these are constantly updated
and posted to: The State of Sustainable Fleets
website.
State of Sustainable Fleets 2024 Market Brief 3
INTRODUCTION
Five years of assessing the State of Sustainable Fleets has revealed a new reality: Clean technology is
here to stay. Each passing year has ushered in new milestones and developments that signal that clean
technology is more than a passing trend. Milestone regulations like California’s Advanced Clean Fleets
(ACF) rule, which require eets to transition to zero-emission vehicles (ZEVs), and the U.S. Environmental
Protection Agency’s (EPA) Clean Trucks Plan, which sets some emissions performance requirements
higher than 80% below today’s levels for heavy-duty (HD) engines, are some recent examples. Rapid
technological developments abound as well, such as the widespread commitment by most of the
leading medium-duty (MD) and HD vehicle manufacturers to produce ZEVs, including hydrogen fuel
cell vehicles, some of whom have already committed to transitioning their entire product portfolio to
these new technologies. There are also sizeable transformations underway, such as the proliferation of
renewable alternatives to fossil fuels like diesel and compressed natural gas (CNG), the latter of which
has almost entirely been replaced by its renewable counterpart in large markets. These events have
dened the last ve years as a decisive turning point in the transportation fuels and technology industries,
as reported in the rst four annual State of Sustainable Fleets Market Briefs and detailed in this edition.
It is becoming increasingly clear that growth in all these solutions will be necessary to achieve eet
operational, cost, and sustainability goals.
Five years has also revealed much about
the difculties inherent in technological
transformation and new technology adoption.
Natural gas and propane have proven their
positive total cost of ownership (TCO) year after
year for best t applications such as goods
and logistics, refuse, passenger transport,
and MD vocational service. Yet vehicle sales
have not consistently achieved double-digit
growth (Figure 1). Transition costs, fuel access,
operational suitability, and competition with
zero-emission (ZE) alternatives are contributing
factors, although the inuence of one over
the other has changed over time. This year,
the industry signaled that new, more powerful
engines for natural gas and propane fueling
will break the trend by ushering in a new wave
of adoption. State of Sustainable eets offers a
forecast of the real impact of these products on
vehicle sales and invites audiences to stay tuned
to its reporting on market responses during the
next few years.
State of Sustainable Fleets 2024 Market Brief 4
2019 2020 2021 2022 2023
20,000
19,000
18,000
17,000
16,000
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
27,000
26,000
25,000
24,000
23,000
22,000
21,000
20,000
19,000
18,000
17,000
16,000
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
Propane
Natural Gas
Battery Electric
Hydrogen Fuel Cell
Total # of Vehicles Sold
2019
6,619
6,176
N/A
N/A
12,795
2020
5,273
6,308
532
10
12,123
2021
1,736
6,477
841
14
9,068
2022
1,490
6,212
13,506
44
21,252
2023
1,729
5,554
26,323
57
33,663
Propane Natural Gas
Battery Electric Hydrogen Fuel Cell
Medium- and Heavy-Duty Vehicle Deployments
2019 - 2023
Figure 1: Annual medium and heavy duty vehicle registrations by drivetrain type from S&P Global Mobility.
(1) Aftermarket sales make up a signicant share of the propane vehicle market, but these are not captured in registration data.
(2) 2019 and 2020 gures are based on natural gas vehicle registration data from S&P Global Mobility, propane OEM sales data provided by PERC, and
independent and public sources. 2021-2023 gures are based on S&P Global Mobility new medium and heavy duty vehicle registrations.
Battery-electric vehicles (BEVs) have beneted
from unprecedented levels of public and
private investment in the history of this industry,
as well as sales and purchasing mandates at
the state and federal levels. The past year saw
commercial BEV deliveries nearly double across
a growing number of applications and states
(Figure 1). Adoption is expected to continue
growing, however, the pace over the next
several years is unclear. Consistently high battery
and production costs, production pauses
and lowered forecasts, delays in California’s
implementation of its eet purchasing mandates,
service model mismatches, and the potential for
multi-year lead times for large electric capacity
upgrades point to an industry in the midst of
growing pains.
Infrastructure has emerged as perhaps the
most critical determinant of the speed of
State of Sustainable Fleets 2024 Market Brief 5
load interconnection processes required by
regional transmission organizations can delay
or even discourage investments in private and
public charging facilities. Early engagement
and strong partnerships with utilities can help to
align expectations for both parties and share
data and information that is critical for planning.
Doing so helps to better sequence eet vehicle
and infrastructure purchasing timelines with utility
capacity planning and upgrade timeframes.
Five years has demonstrated the central role of
innovation that is yet another signal that clean
technology is a new reality for eets. Enormous
investment by producers has been funneled
into a new renewable diesel (RD) market that
is expected to follow a path laid by renewable
natural gas (RNG): saturate the California
market, move to other states with low-carbon
BEV adoption, not because eets are waiting
for widespread and fast public charging, as
some had predicted. Many eets with shorter,
return-to-base operations of all weight classes
are incorporating BEVs at a growing pace,
particularly if their depots and operations allow
slower, less powerful on-site charging. Outside
of these conditions, stakeholders are nding
that the timelines and business models of eets,
charging vendors, and electrical utilities are
poorly aligned for rapid growth. Large electric
capacity service upgrades – particularly those
that may require the utility to site and permit a
new substation or transformer or to follow large
Enormous investment by
producers has been funneled
into a new renewable
diesel (RD) market that
is expected to follow a
path laid by renewable
natural gas (RNG): saturate
the California market, move to
other states with low-carbon fuel
programs, expand nationally.
The past year saw
commercial BEV deliveries
nearly doubling across a
growing number of applications
and states.
State of Sustainable Fleets 2024 Market Brief 6
fuel programs, expand nationally. Both RNG and
RD are “drop-in” solutions for eets with CNG
and diesel vehicles, respectively, that use familiar
fueling architectures and promise greenhouse
gas (GHG) and other emissions reductions
without much change to eet behavior.
These fuels offer critical solutions for eets and
the industry to cost-effectively transition to
sustainable eets and may also ll near-term
gaps in electrical service for BEV operators,
thanks to new generator designs affording eets
exibility. Meanwhile, a growing number of joint
ventures and startups are variously packaging
charging, vehicle, and site development services
to help eets shift to ZE operations on a best-t
basis. While BEVs are the rst ZEV technology to
see wider eet adoption, eet trials of hydrogen-
powered vehicles are beginning to shape an
adoption path. The breadth of innovation in
commercial transportation is a telltale sign of
progress towards a decarbonized industry.
The industry is entering its
period of peak complexity
at this early stage of a
sustainable transition.
The industry is entering its period of peak complexity at this early stage of a sustainable transition. It is a
period marked by widespread regulatory uncertainty from a slew of new regulations and differences
in requirements across jurisdictions. For eets trying to deploy zero-emission technologies to meet some
of these or their own goals, the examples from 2023 and the rst half of 2024 demonstrate many of
the challenges that can come with adoption of new technologies. Yet the industry is responding with
unprecedented investment, innovation, and greater access to the easiest to use sustainable solutions
that offer answers today while laying groundwork for future expansion. The previous year continued
a record ow of $32 billion in state and federal funds available to eets while supplies of renewable
diesel and renewable natural gas reached new highs. The vanguard of new partnerships, innovative
business models, and technologies to utilize natural gas and propane supplies revealed an oncoming
host of innovations to solve the charging challenge. This period of complexity met with investment and
innovation will likely persist for several years, marked by the milestones and breakthroughs of an industry
in transition as described each year in these pages.
The new reality at this ve-year milestone of State of Sustainable Fleets means that most eets, perhaps
all, must take the time to decide which mix of clean technologies works best for their operations. The
trends and experience within the industry captured in these pages demonstrates that eets that take the
time to identify and strategically incorporate the right technologies for their needs will see gains in cost,
performance, driver satisfaction, and/or other operational benets beyond sustainability.
Market wide, the new reality is one in which most of these technologies will be needed to achieve a
state in which all eets are sustainable. The Market Brief and complementary eet education resources
available at www.StateofSustainableFleets.com will continue to support the evaluation, adoption, and
scaling of this market with insights during each of the next ve years and beyond.
State of Sustainable Fleets 2024 Market Brief 7
Confusion in the Wake of New Emissions and
ZEV Regulations Expected to Persist
The landscape for eets in 2023 was characterized by a dual narrative of
confusion and adaptation as manufacturers and customers responded to
the rollout of new, stringent emissions and ZEV regulations. EPA introduced its
Phase 3 GHG emissions standard in late spring 2023 and nalized it just after
the turn of the year as California continued enacting its ACF and Omnibus
Low NOx (Omnibus) rules, introducing new selling and purchasing deadlines
alongside credit/decit systems.
The burden of compliance in California and eight other states that have
adopted some combination of Omnibus and 10 additional states that
adopted ZEV requirements on manufacturers — nearly identical lists of states
— rests largely on vehicle and engine makers who are each taking different
strategies to meet individual rules. Fleets may hear differences in how their
vehicles comply from various manufacturers, in various locations, as a result.
Uncertainty also remains around how states that have adopted Omnibus
will apply any amended regulatory language that emerges from the Clean
Truck Partnership. Confusion for eet operators and the wider marketplace
on engine standards is expected to continue at least for the next few
years until the nation aligns with the EPA plan starting with model year (MY)
2027. Amidst this regulatory upheaval, an unprecedented inux of over $32
billion in federal and state funding annually aims to bring some relief. Even
as federal and some state and local governments signaled their robust
commitments to decarbonizing transportation and improving air quality,
their diverse approaches fostered immense confusion that is expected to
persist for at least the next few years.
KEY FINDINGS
State of Sustainable Fleets 2024 Market Brief 8
Diesel Vehicle Sales Rise Ahead of Regulatory
Changes, Renewable Diesel Supply Continues
Surge
Facing an estimated 12% increase in the price of new diesel trucks as
EPA’s MY2027 emissions standards approach and buoyed by a drop in the
price of fuel, eets purchased 7% more diesel trucks in 2023 compared to
the previous year, with a notable drop in diesel prices to $3.32 per gallon
on average following oil market stability. Concurrently, eet adoption of
renewable diesel accelerated, driven by the fuel’s favorable economics in
states with carbon credit markets and “drop in” compatibility with existing
engines. Nationally, RD consumption increased 68% in 2023 compared to
2022, with most consumption occurring in the western Pacic states where
carbon credit markets ensured diesel price parity. Biodiesel (BD) remained
a widely used and cost-effective blending option for eets pursuing lower-
carbon solutions, but demand did not grow nearly as much.
On the supply side, RD production and distribution grew substantially,
continuing a multi-year trend to increase availability as a sustainable eet
solution, with investments aimed at expanding domestic supply chains to
meet the rising demand. This is a pivotal trend that reects a strategic shift
in the eet industry to reduce emissions without incurring the signicant
nancial and operational risk that the newer ZE options introduce in
numerous applications and geographic areas today. The expanding RD
supply, coupled with the strategic procurement of diesel vehicles ahead
of regulatory changes, describes a period of signicant hedging and wider
adoption of easier-to-integrate solutions within the eet sector.
RNG Leads Growth in Natural Gas Sector, CNG
Maintains Cost Competitiveness
RNG production continued to grow in 2023 with over 150 new facilities
coming online to meet the rising demand from eets seeking improved
sustainability without sacricing economic viability. This growth helped
sustain competitive retail prices even as the average retail price of
conventional natural gas rose to $3.04 due to geopolitical factors, averaging
50% less expensive than diesel on a dollar per diesel gallon equivalent (DGE)
basis. Carbon credit markets in several states including California helped
ensure diesel price parity or better for the renewable version in those states.
Fleet demand for natural gas, particularly RNG, grew for the third
consecutive year although at a more moderate pace. The average NGV
eet used RNG for 70% of their fueling needs by volume in 2023, according
to the annual survey, up from 46% the prior year. However, use is becoming
State of Sustainable Fleets 2024 Market Brief 9
more concentrated with the number of eets operating natural gas vehicles
that use RNG dropping below 50% for the rst time in several years. RNG’s
increasingly negative carbon intensity (CI) continued to secure its value to
eets that used it in 2023 when it attained an average CI of -119 gCO2e/MJ,
a more than 20% improvement over 2022’s gures.
Vehicle sales similarly point to concentrated demand. Natural gas vehicle
(NGV) deliveries dropped 11%. The Class 8 tractor segment saw the sharpest
decline in new vehicle deliveries (20%) followed by a drop in sales to transit
agencies (11%). The majority of new NGV deliveries were made to eets
in refuse (33%) and general freight (29%) vocations, where demand is
expected to grow in the coming years. Cummins’ development of the X15N
engine, expected to enhance NGV appeal by meeting current and 2027
emissions standards, signies that this year’s dip may be a blip in the overall
NGV trend this decade.
Medium-Duty Battery-Electric Vehicle
Deployments Double While Infrastructure
Challenges Intensify
In 2023, BEV adoption surged as more than 26,000 buses, trucks, and vans
were delivered, effectively doubling the record deliveries in 2022. MD
commercial cargo vans and pickup trucks constituted 90% of BEV deliveries,
95% of which were produced by Ford and Rivian. Tractor deliveries
increased six-fold, to nearly 700 units. This growth reects the broadening
interest spanning the eet industry: in every duty cycle and eet type
studied in this report’s survey, nearly 40% of eets reported some BEV usage.
Although sales growth is steep and broad, widespread displacement of
gasoline and diesel vehicles is still far off with most user eets reporting that
BEVs account for only 1-2% of all their vehicles.
While new vehicles rolled off production lines, charging infrastructure
gaps and supply chain delays dominated discussions in 2023. The scale of
upgrades being pursued in larger eet electrication projects constitute
sizeable capital projects which may require longer lead times for siting,
permitting, and interconnection. Utilities need locational data about
expected eet load growth and eets need utility data on existing power
supply, infrastructure capacities, and upgrade costs – both of which can be
difcult to access and may lack necessary detail across a disaggregated
industry of more than 3,000 utilities in the U.S. Innovative “as a service”
models developed rapidly in the past year to mitigate upfront costs for
vehicle access, charging infrastructure, or both. The partnership between
State of Sustainable Fleets 2024 Market Brief 10
utilities, eets, and any third parties such as “as-a-service” providers has
emerged as the crucial element for eet electrication, especially for the
larger projects.
Regional Hubs and Vehicle Availability Push
Hydrogen Economy Forward Despite Signicant
Cost and Infrastructure Hurdles
The hydrogen market in 2023 was marked by pivotal federal investments,
notably the Department of Energy’s (DOE) allocation of $7 billion to seven
proposed fuel production and distribution hub spanning 16 states. This
move, aimed at slashing hydrogen production costs to $1/kg, is expected
to catalyze over $40 billion in private investment. Awardees are in contract
negotiations through 2024, and it will be several years before the H2 Hubs
meaningfully impact fuel price and supply, but advocates assert that the
program reduces the risk for investors exploring hydrogen fuel and vehicle
production today. Despite these advancements, the average retail price of
hydrogen in 2023 nearly doubled from mid-2022 levels to as much as $36/
kg in California, spotlighting the challenge for the road ahead. Fleets in the
annual survey indicate hydrogen fuel cost is a top concern.
One critical development was the controversial draft terms for the Hydrogen
Production Tax Credit (also known as 45V). Many proposed H2 Hubs and
other projects aim for a zero-CI standard, but the draft terms released in
December indicate that deep system changes to supply chain reporting
and multi-party operating schedules may be required for a project to
qualify for these benets. If passed, these terms could render many projects
economically infeasible. The IRS is expected to address the large volume of
comments and release a nal ruling that will be very consequential for future
investment and hydrogen fuel costs by mid 2024.
Vehicle manufacturers expanded in a market previously limited to a few
transit buses and passenger car offerings, with major players like Kenworth,
Peterbilt, and Toyota taking orders for their commercially produced
hydrogen fuel cell Class 8 tractors. Hyundai and Nikola launched much
anticipated demonstrations and deliveries, and Nikola’s HYLA brand
invested in public access fueling infrastructure, setting the stage for greater
adoption by 2025. However, the delivery of transit buses declined, reecting
a cautious market still grappling with high costs, operational suitability, and
nascent infrastructure. Meanwhile, a growing number of engine and vehicle
providers are betting on hydrogen combustion engine architectures as an
affordable bridge to fully ZE fuel cell vehicles.
State of Sustainable Fleets 2024 Market Brief 11
FEDERAL, STATE, AND LOCAL POLICY
AND FUNDING
The past fteen months were a regulatory milestone for more stringent emissions requirements and ZEV
adoption regulations. The U.S. EPA nalized new emissions regulations starting in MY2027 that will force
even further reductions in tailpipe and GHG emissions from diesel-powered vehicles and bring them into
greater competition with clean drivetrains. In California, regulators adopted a pioneering ZE purchase
requirement for many eet owners in the state and began implementing a new diesel emission testing
regulation. Given the array of regulations that were adopted by 2022, this new slew of diesel emission
and ZEV regulations has only added to the confusion amongst engine and truck makers, eet end users,
and the industry as a whole. Meanwhile, big jumps in funding at the state and federal levels that started
in 2021 — estimated at $32 billion this year — especially from the federal Ination Reduction Act (IRA)
and Infrastructure Investment and Jobs Act (IIJA), kicked off numerous clean vehicle and infrastructure
projects nationally. Additional funding will also come from the expansion of low carbon fuel programs
with New Mexico joining the West Coast states. Adjustments that are expected for California’s program
are also intended to lift credit prices in that state, the largest of the low carbon fuel markets.
A previous version was published in April as the 2024 Policy and Funding Trend Brief. This version reects minor developments since that date.
California Regulators, EPA, and Manufacturers Agree to Big
Emissions Cuts and Zero-Emission Goals
In 2023, the EPA and the State of California
nalized new rules that were many years in
the making. These rules set stringent engine
emission requirements nationally and placed
new ZEV purchase requirements on California
eets. In March, the EPA Clean Trucks Plan
went into effect, ushering in a new era for HD
engine emissions standards set for MY2027 and
later engines. As reported in previous years of
State of Sustainable Fleets while the rule was
in draft form, the Clean Trucks Plan will require
engine manufacturers to reduce nitrous oxides
(NOx) emissions for HD engines by more than
80% and particulate matter (PM) by around
50% starting in MY2027.1 In addition to very low
emission standards, these new rules also set new
State of Sustainable Fleets 2024 Market Brief 12
requirements for emission testing, certication
procedures, and extended in-use service and
warranty requirements. EPA’s requirements are
similar to, although slightly different than, those
adopted by California in the Omnibus rule
passed in August 2020. In contrast to the EPA’s
new rule, the California Omnibus regulations
increase in several steps with MY2024, MY2027,
and MY2031 engines, and set different mileages
for useful life. These new requirements are
expected to increase cost and operational
complexity for vehicle operators, which will
increase the attractiveness and competitiveness
of natural gas, battery-electric, and even
hydrogen vehicles that are expected to exceed
these standards. These powertrains have far
fewer requirements when it comes to emissions
testing, emissions certication, and ongoing
maintenance.
Less than one month after the EPA plan was
adopted, California took a pioneering step by
adopting the ACF rule, placing ZEV adoption
requirements on many eet operators as early
as this year. The ACF rule requires state and local
governments, private sector eets, drayage truck
operators, and truck brokerages to make a full
transition to 100% ZEVs between 2035 and 2042
(with compliance dates varying by vehicle type).
Private eets with $50 million in gross revenue
nationwide or 50 vehicles across the country,
with at least one vehicle operating in California,
may comply via a strict commitment to only
purchase ZEVs or by converting segments of the
eet, largely based on body type, at different
rates beginning as early as January 2025.2
Drayage eets cannot add non-ZEV vehicles
into their California drayage eet as of January
1, 2024, while government eet procurements
must be 50% ZEV starting in 2024 and ramping
up to 100% in 2027. While the rule is already in
place, the California Air Resources Board (CARB)
has paused enforcement for so-called “High
Priority” and “Drayage” eets due to litigation
until the EPA provides clarication — expected
mid 2024 — on whether the rule falls under the
state’s emissions waiver granted by the federal
government under the Clean Air Act.3 As CARB
The Clean Trucks Plan will require
engine manufacturers to reduce
NOx emissions for HD engines
by more than 80% and
particulate matter (PM) by
around 50% starting in MY2027.
State of Sustainable Fleets 2024 Market Brief 13
has indicated that it can retroactively enforce
back to the regulation’s formal start date of
January 1, 2024, eets affected by the rule have
effectively been put on notice to continue
progress on their compliance plans.4
The adoption of the Clean Trucks Plan, ACF,
and California’s Omnibus rule introduced
compliance inconsistencies between eet
owners and vehicle manufacturers. For
example, California’s Omnibus rule is similar
to the national Clean Trucks Plan but with
different requirements for emissions phase-
ins and useful life implementation. On July 6,
2023, the Clean Truck Partnership, a signicant
agreement involving CARB, the Truck and Engine
Manufacturers Association (EMA), and major
vehicle manufacturers, emerged as a strategic
alliance to better synchronize California and EPA
regulations and ease the MY2024 transition in
California.5 The Clean Truck Partnership outlined
an agreement that will better align California’s
Omnibus NOx emissions standards with the EPA’s
2027 requirements, providing more lead time
for future zero-emission regulations in California,
and allowing regulated eets under the ACF
rule to purchase legacy engines outside of
California for use in the state. In return, OEMs
have committed to meeting CARB’s ZE sales
requirements and criteria pollutant reduction
regulations and agreed not to oppose similar
efforts in other states.6 While seen as a positive
step, the guidance from the Partnership must be
formalized via regulatory changes, which are
now under development.
The burden of compliance in California and
eight other states that have adopted some
combination of Omnibus and 10 additional
states that adopted Advanced Clean Trucks
(ACT) ZEV OEM requirements for later years —
nearly identical lists of states — rests largely on
vehicle and engine makers who are each taking
different strategies to meet their individual rules.
Fleets may hear differences in how their vehicles
comply from various manufacturers, in various
locations, as a result. Uncertainty also remains
around how states that have adopted Omnibus
will apply any amended regulatory language
that emerges from the Clean Truck Partnership.
Confusion for eet operators and the wider
marketplace on engine standards is expected
to continue at least for the next few years until
the nation aligns with the EPA plan starting with
MY2027.
More recently, on March 29th of this year, the
EPA issued its nal rules for the so-called “Phase
3” GHG emissions standards for heavy-duty
vehicles that will be 20 to 60 percent lower than
the previous iteration issued in 2016.7 The rule will
be phased in between MY2027 – MY2032 and
regulate OEMs of HD vocational vehicles (such
as delivery trucks, refuse haulers, public utility
trucks, transit, shuttle, school buses, etc.) and
tractors (such as day cabs and sleeper cabs on
tractor-trailer trucks). It is expected that OEMs will
meet the requirements with signicantly higher
sales of near-zero emission (NZE) and ZE vehicles
as part of their national portfolio of vehicle sales
in order to meet the new GHG and tailpipe
emission-reduction requirements.
At a more local level, a California air quality
regulator, the South Coast Air Quality
Management District (South Coast AQMD),
already implemented a nearly two-year-old
rule that requires operators of warehouses with
100,000 square feet or more to mitigate the air
quality impact of the diesel trucks coming to
and from their facility. The Warehouse Indirect
Source (WAIRE) rule uses a points system where
Confusion for eet operators
and the wider marketplace on
engine standards is expected
to continue at least for the
next few years.
State of Sustainable Fleets 2024 Market Brief 14
warehouses under the rule generate point
decits based upon the number of diesel truck
trips visiting the facility. These decits must then
be offset with points earned from a menu of
emission-reducing or technology-enabling
actions, such as purchasing and installing low-
emission energy and vehicle technology on-site
and/or requiring visits of ZE and NZE vehicles. An
analysis of the 2022 annual WAIRE Report by TRC
found that the vast majority of points (91.4%) are
generated from ZE and NZE vehicles acquisition
and utilization — heavily weighted toward
utilization — and that about a fth of warehouses
that submitted an annual report paid a fee.8
Currently, the San Diego-area air quality
regulator is considering a similar rule, while the
South Coast AQMD is considering indirect source
rules for the region’s ports and railyards. These
rules introduce additional confusion for eet and
warehouse operators who must understand how
they relate to and interact with other state and
federal regulations and comply with all of them.
www.stateofsustainablefleets.com
As of April 1, 2024As of April 1, 2024
State/Province
California
Massachusetts
New Jersey
New York
Oregon
Washington
Vermont
Colorado
Maryland
New Mexico
Rhode Island
Connecticut
Maine
North Carolina
Status
ACT Adopted
ACF Adopted
ACT Adopted
ACT Adopted
ACT Adopted
ACT Adopted
ACT Adopted
ACT Adopted
ACT Adopted
ACT Adopted
ACT Adopted
ACT Adopted
Withdrawn From Consideration
Withdrawn From Consideration
Withdrawn From Consideration
Beginning MY
2024
2024
2025
2025
2025
2025
2025
2026
2027
2027
2027
2027
—
—
—
ACT AdoptedACF Adopted
States Adopting ACT and ACF Rule
ACT: 11 states adopted, 3 withdrawn | ACF: 1 state adopted
States that have adopted or are in the process of adopting California’s Advanced Clean Trucks (ACT)
and Advanced Clean Fleets (ACF) Rules
A March of Zero-Emission States Continues with Some Pauses
and Pullbacks
year’s publication, 13 states and the District of
Columbia had adopted or were considering
adopting California’s ACT rule. The rule requires
vehicle manufacturers to rapidly increase the
States are given the option to accept EPA’s
national emissions standards for vehicles or
California’s more aggressive ones and a
cadre of states has chosen the latter. As of last
Figure 2: A map of the United States indicating adoption of the ACT and ACF Rules
State of Sustainable Fleets 2024 Market Brief 15
sale of ZE trucks and buses during the next two
decades. Four more states adopted the ACT
rule in 2023 — Colorado, New Mexico, Rhode
Island, and Maryland — totaling 10 states
outside of California that have adopted the
ZEV sales requirement (Figure 2). However,
the year also marked the rst time that states
chose not to adopt or ban the adoption of the
ACT rule. Notably, Connecticut withdrew from
adopting ACT due to bipartisan concerns.9
Similarly, adoption of the rule in Maine and North
Carolina faced challenges, with North Carolina
enacting House Bill 259 to ban the adoption of
the ACT rule.10 Three other states have followed
North Carolina in banning the adoption of a
ZEV mandate similar to California’s ACT rule,
including Ohio, Kentucky, and Kansas. Each
state has signed into law a bill that prohibits
any state agency, department, or political
subdivision from adopting a standard that
restricts the sale or use of motor vehicles solely
based on the energy source of those vehicles.
As the landscape takes a more cautious
turn in a Presidential election year, states are
also taking a “wait-and-see” approach on a
decision of whether to adopt California’s ACF
rule. While California pioneered the ACF rule
in 2023, other states have paused to observe
how California’s implementation unfolds amidst
litigation, delays, and potential amendments.
States indicate they plan to assess the impact
and effectiveness of this very complex rule
before committing to adoption. Notably, states
are also waiting on the results of California’s
waiver request from the EPA for the ACF rule,
described above. The EPA’s pending decision on
whether ACF qualies as an emissions standard
introduces an additional layer of uncertainty.
If the EPA rules that a waiver is not needed,
states should have the exibility to modify and
establish their own ZEV purchase requirements
rather than adhering strictly to the letter of
California’s ACF regulation. California is also in
the process of approving and implementing
several other ZE-focused rules, including an
“eTRU” rule that would require a full transition
to ZE transportation refrigeration units (TRUs)
for trucks and trailers, a ZE forklift rule, and a ZE
cargo handling equipment (CHE) rule. The rst
part of the eTRU rule was adopted in 2022 and
requires all truck TRU eets to begin transitioning
to ZE TRUs. CARB also began developing a rule
for non-truck eTRUs (trailers, containers, railcars)
in late 2023. The ZE forklift rule, which will likely
be approved by CARB’s board in Summer 2024,
would require owner-operators of forklift eets
to comply with a phase-out schedule for older
MY forklifts and begin transitioning to ZE forklifts.
The ZE CHE rule will require owner-operators of
CHE at seaports and railyards to transition their
eets to ZE equipment. The CHE rule is also still
in development and may expand to goods
movement facilities such as warehouses and
distribution centers.
In addition to a suite of emerging ZE purchase
requirements, California also began rolling out
its Clean Truck Check (CTC) program in 2023.
This new regulation requires eets to regularly
test and repair emissions issues for any diesel
and alternative-fueled engines that operate in
the state. This is part of California’s strategy to
go ZEV wherever possible while also reducing air
pollution impacts from any remaining non-ZEVs.
Given the huge number of new requirements
hitting the books for the rst time in 2023, CARB
adjusted some to accommodate some real
world implementation challenges with CTC.
While eets had to register and pay new fees in
2024, the rst emissions tests have been delayed
until 2025.
State of Sustainable Fleets 2024 Market Brief 16
part of it, the U.S. Department of Energy (DOE)
has made the largest hydrogen commitment
in the country’s history through the Hydrogen
Hubs Program. A total of $7 billion will be used
to establish seven regional hubs across 16 states
to produce and distribute hydrogen for MD and
HD transportation, as well as regional industry
and energy needs. The agency also announced
a total of $42 billion in additional investment
from public and private entities engaged
with the seven regional hubs in Appalachia,
California, the Midwest, the Gulf Coast, the
American heartland, the Mid-Atlantic, and the
Pacic Northwest. The scale and scope of this
investment signals signicant commitment to
utilizing hydrogen in the transportation industry,
and the hubs are expected to start commercial
distribution of hydrogen as early as 2033. If
successful, the hubs are expected to spark a
national network of clean hydrogen producers,
consumers, and infrastructure, while reducing
the cost of hydrogen production and building
commercial awareness and demand in sectors
such as heavy transportation.
New federal investments also owed to EV and
infrastructure projects nationally, many of which
Record Federal Funds Start to Flow to Clean Vehicle and
Infrastructure Projects
Public and private incentives for clean
transportation remain at an all-time high. More
than $32 billion in funding is expected in 2024,
with an estimated $20 billion available for MD
and HD eets directly. The remaining $12 billion
focuses on buses, light-duty vehicles, research
and development, manufacturing, and nonroad
projects. West and East Coast states, as well
as Texas, continue to increase their funding
commitments, and private utilities continue to
represent the fastest growing segment of new
funding as they launch programs to incentivize
electric vehicle (EV) charger installation for their
business and residential customers.
Funding from 2021’s historic IIJA, the Bipartisan
Infrastructure Bill, has started to roll out and
dene timelines, technologies, and geographies
for clean eet transportation investments. As
More than $32 billion in
funding is expected in 2024,
with an estimated $20 billion
available for MD and HD eets
directly.
State of Sustainable Fleets 2024 Market Brief 17
are aimed at or expected to benet MD and
HD vehicles. In the rst quarter of 2024, the U.S.
Department of Transportation’s (DOT) Federal
Highway Administration (FHWA) announced
the rst round of awardees for the Charging
and Fueling Infrastructure (CFI) Program, with
more than $260 million of the $622 million
available going to BEV and hydrogen fuel cell
infrastructure on highways. With the CFI program,
DOT targets MD and HD charging infrastructure
— many of the highway projects will include
megawatt charging systems (MCS) designed for
rapid charging of HD BEVs. Projects in California
($82.8 million) and Texas ($70 million) took the
lion’s share of the eet-friendly awards, followed
by New Mexico ($64 million), New York ($15
million), and Washington ($12 million). These
projects will be operational by 2030, and a
second round of CFI funding is slated for Spring
2024.
While federal CFI funds support ZE freight
transportation, the DOT’s other ZE charging
program, the National Electric Vehicle
Infrastructure (NEVI) Program, has prioritized light-
duty, publicly accessible charging infrastructure
in the initial $170 million awarded to projects.
As a pillar of the Biden Administration’s goal
to bridge the public charging gap, NEVI will
allocate $5 billion nationally over the next four
years to create charging corridors along major
highways, and during that time, the focus may
grow to include MD- and HD-friendly projects in
later funding rounds. So far, 16 states have issued
awards from their rst rounds, with Ohio, New
York, and Pennsylvania already opening their
rst NEVI-funded charging stations to the public.
The program ultimately aims to install 500,000
chargers across the country and includes
set-aside funds to repair and replace existing
chargers.
Beyond Hydrogen Hubs, CFI, and NEVI, the
EPA is expected to announce awardees from
three more programs beneting eet operators
this year: the Clean Ports Program ($3 billion),
the Clean Heavy-Duty Vehicles Program ($1
billion), and the Climate Pollution Reduction
Grant Program ($4.6 billion). While the rst
two programs target specic sectors for ZE
technologies and supporting infrastructure, the
Climate Pollution Reduction Grant Program
will fund a range of solutions across sectors to
maximize GHG emissions reduction, including
freight and eet transportation electrication.
Combined, these three programs represent an
$8 billion investment, a good portion of which will
drive national adoption of MD and HD vehicles
and charging infrastructure.
Three programs represent
an $8 billion investment,
a good portion of which will
drive national adoption of MD
and HD vehicles and charging
infrastructure.
Low-Carbon Fuel Programs Expand after Multi-Year Pause while
California Aims to Lift Credit Values
The last several years have seen a status quo
for low-carbon fuel programs, but momentum
has begun for expansion and revisions. These
programs create a marketplace for technologies
that generate credits based on carbon-
equivalent emission reductions produced by
the full lifecycle of the fuel or energy source
that help generate demand for and a return on
new clean technology investments. California’s
version, the Low Carbon Fuel Standard (LCFS),
State of Sustainable Fleets 2024 Market Brief 18
Year
2015 2016 2017 2018 2019 2020 2021 2022 2023 (Q1-Q3)
$0
$50
$100
$150
$200
$250
$300
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
Average Carbon Credit Price ($/credit)
Carbon Credits (Metric Tons of CO2e)
$88.79
$159.56
$193.84 $198.86
$178.52
$99.66
$72.52
$99.34
$54.78
Ethanol Electricity Renewable Natural Gas Biodiesel Renewable Diesel Other
Average Price
www.stateofsustainablefleets.com
Figure 3: A chart of LCFS credit prices over time, with the number of credits broken up by fuel type
is the largest existing program as a $2.8 billion
marketplace in 2023, down nearly $1 billion as
compared to 2022 due to lower credit prices
despite an increase in credit trading. The
most striking development on the LCFS market
reported in the past few years of State of
Sustainable Fleets has been rock-bottom credit
values driven by a dramatic increase in the
supply of certain credit-generating fuels, notably
renewable diesel, renewable natural gas, and
electricity (Figure 3). From Q32022 to Q32023,
the most recent 12-month period with available
aggregate market data, prices averaged
$72.53/ megaton (MT) coming off a high of
$83.02/MT average for the month of May and a
low of $64.91/MT for the month of February.
The past year’s biggest development in the
state LCFS market has been the potential
revisions under consideration by the program’s
administrator, many of which are focused on
boosting credit values and increasing investment
in low-carbon fuel technologies. Among the
many updates, CARB is considering adjusting
the benchmarks for additional carbon emission
stringency. Specically, proposals under
consideration would increase the benchmark
from 20% to 30% reduction by 2030, with further
reductions to 90% by 2045. The adjustment is
intended as a response to the massive supply
of LCFS credits contributing to low credit prices
and is expected by proponents to bring back
balance to prices in the oversupplied market.
Industry and academia have questioned if the
adjustments will be sufcient to raise credit prices
among additional supplies expected to hit the
California market. Specically, they point to
expansion and growth in the renewable diesel
market that could outpace the proposed rules
as they are implemented.
Outside of California, only Oregon and
Washington had previously adopted similar
rules. In early March 2024, New Mexico became
State of Sustainable Fleets 2024 Market Brief 19
the fourth U.S. state to nalize and approve
a low-carbon fuel market, called the Clean
Transportation Fuel Standard. The program
would require a 20% reduction in lifecycle
carbon intensity of fuels sold in the state by 2030
and 30% by 2040. Although the bill has now been
enacted, an advisory committee of industry and
community groups must be formed to advise
on development of rules, ahead of the July 1,
2026, implementation date. New Mexico is the
rst state to pass a new program among those
previously considering it, including Minnesota,
New York, and New Jersey, all of whom will
likely work to pass similar programs in their
respective 2024 legislative sessions. In addition
to the aforementioned states, Hawaii and
Illinois are now considering similar low carbon
fuel programs. The growing level of activity
around low carbon fuel programs will stimulate
additional investment in clean technologies and
provide greater returns for adoptees, forming
an important leg underpinning the success of
natural gas, renewable fuel, and EV adoption
in those states as has been done on the West
Coast.
1 Gladstein, Neandross and Associates (GNA), State of Sustainable Fleets 2023 Market Brief. May 2023, Santa Monica, CA. Available at: https://www.
stateofsustainableeets.com/
2 More detail on the rule in the State of Sustainable Fleets 2023 Market Brief, available at: https://www.stateofsustainableeets.com/
3 The Clean Air Act allows California to seek a waiver of the preemption which prohibits states from enacting emission standards for new motor vehicles. EPA must
grant a waiver, however, before California’s rules may be enforced. More at: https://www.epa.gov/state-and-local transportation/vehicle-emissions-californiawaivers-
and-authorizations
4 Kingston, John. ACF spurs small gain in zero-emission drayage trucks at Port of Long Beach. Freightwaves, 4 March 2024, https://www.freightwavescom/news/acfspurs-
small-gain-in-zero-emission-drayage-trucks-at-port-of-long-beach
5 California Air Resources Board (CARB). CARB and truck and engine manufacturers announce unprecedented partnership to meet clean air goals. CARB,
https://ww2.arb.ca.gov/news/carb-and-truck-and-engine-manufacturers-announce-unprecedented-partnership-meet-clean-air
6 California Air Resources Board (CARB) and Truck and Engine Manufacturers Association (EMA). Final Agreement Between CARB and EMA. CARB, 6 July 2023,
https://ww2.arb.ca.gov/news/carb-and-truck-and-engine-manufacturers-announce-unprecedented-partnership-meet-clean-air
7 Babcock, Stephane. “EPA Sets Stricker Phase 3 Emission Standards, Industry Reacts.” ACT News, 1 April 2024, https://www.act-news.com/news/epa-sets-stricker-phase-3-
emission-standards-industry-reacts/
8 TRC analysis of South Coast AQMD Annual WAIRE Report (AWR), 16 February 2024.
9 Catenacci, Thomas. Dem governor withdraws electric vehicle mandate in stunning blow to environmentalists. Fox News, 28 November 2023, https://www.foxnews.
com/politics/dem-governor-withdraws-electric-vehicle-mandate-stunning-blow-environmentalists
10 Lambeth, Donny. “House Bill 259 / SL 2023-134 (2023-2024 Session) - North Carolina General Assembly.” Ncleg.Gov, 3 October 2023, www.ncleggov/BillLookup/2023/H259
State of Sustainable Fleets 2024 Market Brief 20
DIESEL VEHICLES
Diesel truck procurements rise ahead of stringent
emissions regulations.
Fleets purchased about 7% more commercial trucks (mostly diesel) in 2023 than in 2022, although orders
slowed at year-end as the freight market softened.1 Industry analysts expect sales to hold or rise slightly
as demand for MDVs grows, but sales of Class 8 trucks dropped due to market headwinds in 2024. The
next few years will likely show an upswing in demand, however, as eets rush to purchase new trucks
before the EPA’s MY2027 heavy-duty engine standard kicks in.
warranty periods by three to four times and their
useful life limits by 50% or from 435,000 miles to
600,000.
In California, the ACF rule was approved with
a tiered ZEV purchasing standard for many
commercial eets operating in the state starting
on January 1, 2024. Industry experts speaking
with TRC observed that purchases of used
diesel trucks by eets that conduct business in
the state increased in 2023 and may continue
to rise as eets hedge against the future cost
of compliance. Experts anticipate a similar
national trend: Fleets will buy newer and used
diesel trucks over the next three years to delay
buying the more expensive trucks with MY2027
engines as long as possible. Across the country, a
softening freight market brought down the price
Estimates suggest this standard could raise diesel
vehicle costs by approximately 12%.2,3 Approved
in early 2023, the EPA’s Clean Trucks Plan lowers
the NOx standard on Class 8 diesel engines by
82.5% from the current standard, or to 0.035 g/
bhp-hr in normal operation, and lowers the PM
limit by approximately 50%, by MY2027. It also
requires engine manufacturers to extend their
Fleets purchased about 7%
more commercial trucks in
2023 than in 2022, signaling an
upswing in demand as eets rush
to purchase new trucks before
the EPA’s MY2027 heavy-duty
engine standard kicks in.
State of Sustainable Fleets 2024 Market Brief 21
of used trucks to an average of $68,000, a 26%
drop from mid-2022 to mid-2023.4 In a year when
the cost of HD ZEVs held steady or increased,
diesel trucks were even more attractive to eet
operators.
If trends hold, strong new and used diesel
vehicle sales can be expected for the next
three years. A new agreement between EMA,
which represents manufacturers, and CARB
largely aligned California’s 2024 and 2027 NOx
emissions standards with the EPA’s and included
an agreement to develop regulations and
compliant equipment along realistic timelines
toward that goal.5 This has provided much
needed stability for the engine and vehicle
industries to complete design, testing, and
certication in time for eets’ purchasing cycles.
Of the eets that reported using efciency
technologies and practices in this year’s annual
survey, 63% expect diminishing returns on new
investments of this type going forward. As
reported last year, the average fuel economy
for diesel trucks participating in NACFE’s long-
running efciency study plateaued between
2017 and 2021.6 The same study demonstrated
lower annual gains closer to 1% per year for
eets that have integrated many proven
efciency technologies and practices, as well as
those that purchased the newest vehicles. The
manufacturing industry widely acknowledges
that the engine emissions standards required
Fleet condence in efciency
gains wanes, but Volvo pushes
limits once more
nationally by EPA starting in MY2027 cannot
be cost-effectively met by efciency measures
alone.7
Fleets also saw the return on their fuel-saving
investments decline. In 2023, the average price
of diesel dropped 12% to $3.32 per gallon while
the price of the highest blend of biodiesel (BD)
commonly used, B20, dropped 9% to $3.25 per
DGE.8 With state, federal, and local air quality
and GHG regulators adopting more aggressive
mandates on set timelines, eets appear to be
shifting their focus and resources away from
efciency improvements on conventional ICEs
and towards more aggressive carbon-cutting
solutions like renewable fuels, NZEVs, and ZEVs.
For eets that purchase Class 8 tractors, Volvo
offers one more potential big leap in efciency.
The Swedish OEM’s North American division
impressed audiences with a 2024 remodel of its
popular VNL with a design that the OEM intends
“There are still opportunities for
efciency, but the gains are not
as dramatic. We look forward
to results from the development
work for SuperTruck II and III.”
– Taki Darakos, Vice President of
Maintenance and Fleet Services,
Pitt Ohio Express, Pennsylvania
The EPA’s Clean Trucks Plan
lowers the nitrous oxide
(NOx) standard on Class 8
diesel engines by 82.5% from
the current standard for MY2027.
State of Sustainable Fleets 2024 Market Brief 22
to meet EPA’s MY2027 standard with diesel fuel.9
A variety of innovations to the body, engine, and
transmission developed in parallel with the U.S.
Department of Energy’s SuperTruck II program
improved fuel economy by up to 10% compared
to the prior VNL, while offering higher torque and
horsepower and faster speed changes, meeting
the needs of diverse applications.
While Volvo’s new engine/vehicle offering can
serve eets in hard-to-decarbonize regions
or market segments, the manufacturer is
positioning this product as a necessary bridge
to a decarbonized future. Notably, the highly
aerodynamic VNL platform will also be the basis
of Volvo’s future technologies and powertrains,
including battery electric and hydrogen fuel cell,
as well as fossil-free fuels in the ICE.
2022.10 The growth of other state-based carbon
credit markets along the West Coast anchored a
68% increase in RD use nationally.11
Survey results and high-prole eet commitments
suggest that demand for RD is on a strong
growth path. More eets that participated in
this year’s eet survey reported using RD in 2023
(38%) than in 2022 (27%), and it was one of the
Fleet appetite for RD expands,
justifying growing supply on a
national scale
Demand for RD surged in 2023. In California, the
nation’s incubating market for RD use, volumes
of RD reported in the state’s LCFS program
increased approximately 17% compared to
State of Sustainable Fleets 2024 Market Brief 23
most popular clean technologies among public/
government eets (40% of responses in this eet
category). New York City is one strong example,
signing an agreement for 16 million gallons of a
RD/BD blend (95%/5%) to support a full transition
of its diesel-powered equipment and vehicles
by June 2024.12 In the private sector, Rio Tinto is
switching its entire local Kennecott operation of
90 HD vehicles in Utah to RD.13
While some eets are making sweeping
commitments, this year’s survey showed that
RD use among most eets is limited today. On
average, only 3% of the vehicles operated
by surveyed eets used RD in 2023, although
the average use rate was slightly higher for
public/government eets (8%). Part of this can
be explained by difculty obtaining supply
outside of West Coast markets where low-
carbon fuel programs help achieve price-
parity, but it also could suggest that more eets
are experimenting with RD before rolling out
on larger scales. Meanwhile, producers and
distributors continue to lay the groundwork to
grow availability, a trend that began several
years ago. Distribution efforts expanded in the
Midwest with investments from industry leader
Neste, while numerous investors and facilities
scaled up their operations in California.14,15
Several distribution terminals opened in New York
and Washington, and a southeastern location
is expected in 2024.16,17 Chevron Renewable
Energy Group is undergoing an improvement
and expansion project at its Geismar, Louisiana,
RD facility, which is expected to increase annual
production from 90 million gallons to 340 million
gallons starting in 2025.18
While supplies grow, producers have also relied
on a wider variety of feedstocks that have
resulted in reduced GHG emission benets. In
2023, the average carbon intensity (CI) of RD
increased 15%, which resulted in higher GHG
emissions per gallon than the previous year.19 As
a result, the average gallon of RD last year had a
lifecycle CI that was about 60% lower than that
of conventional diesel, according to California’s
version of the GREET model when compared
to a gallon of ultra-low sulfur diesel (ULSD),
or approximately 42 grams carbon dioxide-
equivalent per megajoule of energy.20 Whether
producers will be able to access their preferred,
lower-carbon intensity feedstocks at competitive
prices while production expands will determine
the GHG-reduction advantage — on a lifecycle
basis — of running a eet on RD.
Fuel producers are helping eets access RD
by blending it not just with diesel but also with
BD, enabling eets to leverage the unique
advantages of both biofuels. BD is widely
available for blending with diesel up to 20% of
total fuel volume. Use of BD blends continues
to grow: 29% of surveyed eets used a BD
blend in their vehicles, a slight increase from
2022. National data shows that the amount
of BD consumed increased 18% in the rst 10
months of the year relative to the same period
in 2022. However, eet use in California dropped
approximately 7%, continuing a trend within the
state that began in late 2021.21,22 This decline
likely reects eets replacing some BD with RD in
a state where incentives help keep RD costs at
parity with conventional diesel.
“We are currently using R99
in California and Oregon.
We would use R99 in our
other locations if the supply
was there.”
– Fritz Pfauth, Fleet Strategy and
Innovation Manager, Sunstate
Equipment Co., Arizona
Demand for RD surged in 2023, with
carbon credit volumes in California
increasing approximately 17%
compared to 2022, anchoring a
68% increase in RD use
nationally.
State of Sustainable Fleets 2024 Market Brief 24
SIDEBAR: DO FLEETS WANT MORE RENEWABLE FUEL?
Fleet interest in renewable alternatives to diesel is signicantly driven by vehicle and engine
compatibility considerations, according to this year’s eet survey results. The ndings indicate that 75%
of eets currently using RD would buy it in greater quantities if they could access it without additional
cost, and 63% have asked their providers about the option. Of the eets that would not buy blends with
a higher RD-to-diesel ratio than their current standard, several are either already using the highest-ratio
blend (R99) or are set on moving away from diesel-like fuels altogether. Among surveyed eets that are
currently using BD, 58% would buy higher ratio blends if they could secure it at no extra cost, and only
half of these eets have inquired. Fleets that expressed reservations about a higher BD ratio pointed to
concerns such as gelling and engine warranties that experienced users know how to manage.
A shortfall against targets does
not deter federal, industry
biofuel supply investments
The EPA’s blending requirements have historically
inuenced biofuel production and the level
of consumption in the transportation industry.
In 2023, however, the agency set targets
that fell short of the fuel industry’s production
capacity. While the 2023 RD target was 120
million gallons greater than the 2022 target,
the proposed targets for 2024 and 2025 fell
short of expectations by more than 300 million
gallons per year. Methodological changes and
adjustments for past errors reportedly account
for the shortfall, and the industry expects to
exceed targets for the next several years.23
Notably, Neste began expanding its RD
production operations beyond the West Coast,
its primary end-use market. In 2023, Neste
partnered with Hightowers Petroleum and
Coleman Oil Company in the Midwest and
Washington, respectively, to distribute RD more
widely.24,25 Market analyst S&P Global Mobility
predicts that biomass-based diesel — mostly
RD — will account for 10% of the diesel-like
fuel consumed by the transportation sector by
2030.26 This is a signicant jump from 2022, when
bio-based diesel accounted for 2% of the diesel
consumed in the U.S.27
The U.S. Department of Agriculture’s Higher
Blends Infrastructure Incentive program has
invested more than $77 million in BD and ethanol
production and sales since 2020 with the aim
of raising sales by 1.2 billion gallons annually.28
Increased biofuel production is generally
expected to support rural economies while
making carbon reducing fuels available to eets
in all areas of the country. In 2023, the Higher
Blends program awarded more than $480,000 to
Pilot Travel Centers to equip multiple locations
in 16 states to sell more biofuels.29 Introducing
biofuel options across this vast station network
could accelerate heavy-duty vehicle (HDV)
eet condence in adopting these diesel fueling
alternatives.
U.S. Department of Agriculture’s
Higher Blends Infrastructure
Incentive program aims to
raise sales by 1.2 billion
gallons of BD and ethanol
annually.
State of Sustainable Fleets 2024 Market Brief 25
New innovations could unlock
higher renewable fuel use for
trucks
In response to the possibility of renewable fuel
production growth and eets seeking solutions
for deeper GHG emission reductions, producers
and manufacturers are exploring opportunities to
enable use of higher renewable blends of BD and
even ethanol and gasoline with existing engine
architectures. Fuel-adaptive engines that could
allow eets to use multiple eligible fuels available
on a given route are in development. In 2023,
Chevron and Cummins announced a partnership
building on previous strategic collaboration on
hydrogen and renewable natural gas that is
expected to encompass other liquid renewable
fuels, such as renewable gasoline blends,
biodiesel, and renewable diesel.30
Two new companies are currently working
with fleets to develop and market solutions
leveraging two of the most widely available
biofuels: biodiesel and ethanol. Optimus
Technologies has successfully worked with
several large fleets, engine manufacturers,
and fuel suppliers, including Chevron
Renewable Energy Group, to develop a
vector system enabling HDVs to operate
successfully on blends with BD percentages
exceeding 20% and up to 99%. The system
starts and shuts down a vehicle’s engine
using conventional diesel and switches to
biodiesel or biodiesel blends when the vehicle
has reached optimal operating condition. A
study contracted by the company comparing
Class 8 trucks using this system in trucks with
a standard engine using B11 found that the
vector system paired with a highly renewable
blend reduced PM emissions by nearly 60%
with no material increase in maintenance
time or costs.31 Tailpipe GHG emissions also
decreased in the study, and there was no
meaningful increase in NOx emissions, the
company reports. Chevron Renewable
Energy Group reports that its B100 fuel paired
with the vector system can reduce a Class 8
truck’s carbon emissions by up to 88% relative
to a diesel baseline.32 As of January 2024,
Optimus’ system was being used on more
than 500 trucks and buses across the U.S. with
warranty support from the vehicle and engine
manufacturers.33 Optimus is also piloting the
technology with a fuel retailer in California,
using a fueling exemption from the state’s 20%
blend limit that allows it to support multiple
fleet customers.
Fleet partner PepsiCo reports that the Optimus
system allows a core segment of its national
eet to perform reliably while supporting
corporate sustainability goals. For the past two
years, PepsiCo has been using the system on
State of Sustainable Fleets 2024 Market Brief 26
Class 8 tractors running its longer middle-mile
routes through the central plains of the U.S.,
achieving GHG emissions reductions with B99
while maintaining the exibility to refuel with
ULSD on-route as necessary. PepsiCo noted that
the system’s affordable cost and the warranty
support could make it attractive to for-hire carriers
serving the growing number of shippers that track
Scope 3 GHG emissions.34 PepsiCo is hopeful
that higher BD-to diesel ratio blends will become
easier to nd on route. Optimus is working on this
with stakeholders and estimates that installing a
15,000-gallon BD tank with a dedicated nozzle at
an existing fueling station costs between $300,000
and $400,000, but that programs such as the
Higher Blends grant program can cover up to 50%
of that expense. Adding a dedicated nozzle to
existing BD tanks already used for blending is a
negligible expense.
Another company testing engine modication
systems is ClearFlame. This startup, which
is in early demonstration before offering a
commercial product, is adapting engines to run
on ethanol and green methanol and claims it
can reduce GHG emissions by 40-45% compared
to a conventional truck, depending on the
fuel feedstock.35 When paired with a low NOx
engine, the technology may support up to a 95%
reduction in NOx emissions compared to diesel.
ClearFlame’s approach replaces the engine
control unit to allow fuel mixing within the engine
at the point of ignition. ClearFlame is currently
leasing uptted Class 8 trucks, and in early 2024, it
announced its rst sale to eet Vander Haags.36
As with biodiesel, improving access to pure
ethanol requires close coordination with the fuel
retail industry. Ethanol is widely available in most
regions of the U.S. as a 15% or 85% blend with
gasoline and is about 40% less energy-dense than
diesel. ClearFlame reports that it is working with
stakeholders to identify promising locations for
dedicated ethanol fueling lanes.
The approaches described above prioritize
eets’ most common concern with RD, BD,
electricity, and hydrogen, affordable access to
fuel. If successfully deployed in the markets that
are not constrained by future ZEV targets, new
technologies such as these engine modication
systems could help widen the population of
eets able to reduce their emissions this decade.
Further eet testing and stronger commitments
from fueling retail partners will help determine the
real potential for fuel-exible architectures.
“We have used renewable
diesel exclusively since 2016 at
our city fuel site. B5 and B20 are
onl purchased when fueling at
our city site is unavailable.”
– Bradley Northup, Public Works
Superintendent, City of Carlsbad,
California
State of Sustainable Fleets 2024 Market Brief 27
INDUSTRY PERSPECTIVE – ENGINE TECHNOLOGY FORUM
While the journey to a zero-emissions future is well
underway, the nation’s trucking eet continues
to be dominated by internal combustion engines
(ICE), namely diesel technology, a trend we
expect to continue for a decade or more.
Based on the most recent vehicles-in-operation
data available, 76% of all commercial vehicles
(Class 3-8) in the U.S. are powered by diesel
engines; 23% gasoline, 0.4% CNG, 0.9% other,
and 0.1% electric.37 Of the largest diesel trucks
(Class 8), 97% are powered by diesel, 1.3% CNG,
1.6% other, 0.2% electric and 0.1% gasoline. As
of 2023, 57% of all diesel-powered commercial
trucks operating on U.S. roads were the newest
generation (2010 and newer) that achieve very
low levels of particulate and nitrogen oxide
emissions. Though exact year end data for 2023 is
not yet available at publication time, if adoption
trends of advanced diesel vehicles continue as
in previous years, we expect that 60-63% of the
current national diesel eet to be the newest
generation, state-of-the-art technology in 2024.
California’s ACT and ACF rules dictate
requirements for manufacturers to produce and
eets to purchase ZEVs in California and other
opt-in states in the coming years at varying
degrees based on truck type.38 Class 8 trucks
are the largest focus because they consume
the most fuel, and by 2035, 40% of Class 8 truck
tractor sales nationally are expected to be ZEVs
per timetables in these rules. That leaves 60%
of Class 8 truck sales in 2035 and beyond that
would not be required to be ZEV. Therefore, it is
likely that internal combustion engines, namely
diesel and natural gas, will continue to dominate
heavy-duty trucking for decades to come.
New regulations from EPA and CARB will drive
further improvements to HD ICE. The Clean Truck
Partnership between the EPA, California, and
engine manufacturers will drive further cuts in
NOx and PM emissions and expand warranty
coverage for 2027 and later MY vehicles. In just
three years, the new generation of diesels will be
even nearer to zero emissions. Relative to current
rules, the new NOx and/or PM standards are
more than 80% stronger and increase the useful
life of governed vehicles by 1.5–2.5 times and will
yield emissions warranties that are 2.8–4.5 times
longer.39 The EPA/NHTSA Phase 3 GHG nal rules
for MD and HD trucks rules are likely to require
further efciency improvements and lower GHG
emissions.
Manufacturers continue to improve ICE
technology. Volvo trucks just announced a new
VNL series Class 8 truck powered by diesel, that is
up to 10% more fuel efcient than prior models.40
Cummins also announced a new fuel-agnostic
HD truck engine design for advanced diesel,
natural gas, and hydrogen ICE, demonstrating
continued investment and diversity for ICE
technologies.41
Interest in hydrogen as a fuel for ICE is growing.
Hydrogen is a zero-emission fuel that when
produced in a sustainable way will deliver
signicant climate benets using traditional
internal combustion engine manufacturing,
servicing, and fueling technologies already in
place.42 With a high energy content by weight
and three times greater energy density than
diesel, it requires special pressurized fuel tanks
but can deliver diesel-like vehicle performance.
With less stringent fuel purity requirements than
State of Sustainable Fleets 2024 Market Brief 28
fuel cells, hydrogen ICEs may have easier access
to hydrogen supplies and offer eets another
option for reducing carbon emissions.
Renewable biobased diesel fuels offer an
increasingly available, affordable, and
compelling option for eets to reduce GHG and
other emissions without new vehicles or fueling
infrastructure.43 According to the U.S. Energy
Information Administration, RD production is
set to expand by 30% annually in 2024, and
2025.44 Trucking companies that are invested in
diesel trucks today can continue to leverage
those investments in the future, by using low-
carbon renewable biobased diesel fuels that
reduce GHGs and other emissions. The benets
of using RD were underscored in a recent
study that evaluated options for commercial
truck eets in a 10-state region of the heavily
traveled Northeast corridor.45 The study found
that, compared to a full electrication strategy
between now and 2032, three times the
reduction in carbon dioxide emissions can be
achieved at 25% of the cost by accelerating
the turnover of older trucks to new advanced
technology diesel models and utilizing low-
carbon RD and BD across the entire eet.
1 Greenhalgh, Keiron. Class 8 Sales Fall for Fourth Consecutive Month in November. Transport Topics News, 13 December 2023, https://www.ttnews.com/articles/class-8-\
sales-november-2023. Additionally validated with Engine Technology Forum in Q1 2024
2 Fisher, Chris. “Heavy Truck Forecast and Alternative Fuels Update.” Diesel Progress, September 2023 edition, p41-42; “Forecast 2024” Ken Vieth, p38-39,
https://www.powerprogress.com/magazines/power-progress/issue-archive
3 Crissey, Alex. ACT Research: Forecast expectations for Class 8 and trailers moderate. Fleet Equipment, 23 October 2023, quoting Kenny Vieth, President and
Senior Analyst of ACT Research. https://www.eetequipmentmag.com/act-research-forecast-expectations-for-class-8-and-trailers-moderate/
4 Greenhalgh, Keiron. Used Truck Market Can Likely Handle Yellow Liquidation. Transport Topics News, 31 August 2023, https://www.ttnews.com/articles/used-truck
marketyellow
5 California Air Resources Board (CARB). CARB and truck and engine manufacturers announce unprecedented partnership to meet clean air goals. CARB, 6 July 2023,
https://ww2.arb.ca.gov/news/carb-and-truck-and-engine-manufacturers-announce-unprecedented-partnership-meet-clean-air
6 North American Council for Freight Efciency (NACFE). 2022 Annual FLEET FUEL Study. NACFE, December 2022, https://nacfe.org/research/affs/
7 Gladstein, Neandross & Associates (GNA). State of Sustainable Fleets 2023 Market Brief. May 2023, Santa Monica, CA https://www.stateofsustainableeets.com/
8 Alternative Fuels Data Center. Fuel Prices. https://afdc.energy.gov/fuels/prices.html
9 Zimmerman, Kyle. Volvo Trucks North America Unveils All-New Volvo VNL Designed to Change Everything. Volvo, 23 January 2024, https://www.volvotrucks.us/news-
andstories/press-releases/2024/january/volvo-trucks-north-america-unveils-all-new-volvo-vnl-designed-to-change-everything/. Additionally validated with Volvo Trucks
North America in Q1 2024.
10 California Air Resources Board, Low Carbon Fuel Standard Quarterly Data Spreadsheet. CARB, accessed 28 February 2023, https://ww2.arb.ca.gov/resources/docu
ments/low-carbon-fuel-standard-reporting-tool-quarterly-summaries. Q4 2023 values are estimates based on the prior four quarters due to report publication deadlines.
11 TRC analysis of US Energy Information Administration. January 2024 Monthly Energy Review. Table 10.4b, Renewable Diesel Fuel Overview, 29 January 2024, https://www.
eia.gov/totalenergy/data/monthly/index.php. Data does not specify end-use sectors but it is generally accepted that the majority of RD is used in on-road
transportation.
12 Tang, Frank. “Interview: Approved Oil Seeks to Expand Renewable Diesel Use as Heating Fuel.” OPIS Net, 22 December 2023.
13 Singh, Upasana. Rio Tinto to fully move towards renewable diesel at Kennecott. Reuters, 5 December 2023, https://www.reuters.com/sustainability/rio-tinto-fully-
movetowards-renewable-diesel-kennecott-2023-12-05/
14 Greenhalgh, Keiron. Renewable Diesel Output Rises as Alternatives Proliferate. Transport Topics News, 10 May 2023, https://www.ttnews.
com/articles/renewable-diesel-rises?utm_source=daily&utm_medium=newsletter&utm_campaign=newsletter&mktId=15653097&mkt_
tok=OTA1LUJCVy04NzYAAAGLqoRykLmIERJ5DafVUCwJ7T9JP02CvNC78rf4lkyAgNvIs4sxVa47bOjODqBs5Vbl0bibXUlbNQusP9P7i3i1R0P5JCkryKtzrUu5zaTukYi5gQ
15 Neste Corporation. Neste Partners With Hightowers Petroleum To Provide Renewable Diesel To Customers In The Midwest. Biomass Magazine, 22 November 2023, https://
biomassmagazine.com/articles/neste-partners-with-hightowers-petroleum-to-provide-renewable-diesel-to-customers-in-the-midwest
16 Kerns, Katie. Renewable Diesel Comes to New York. Global Partners, 20 June 2023, https://www.globalp.com/news/globalglo/evolving-standards/renewable-
dieselcomes-to-new-york/
17 Allen Schaeffer, Executive Director, Engine Technology Forum, interview with TRC, 12 January 2024.
18 Chevron Renewable Energy Group staff, email with TRC, 17 April 2024.
19 California Air Resources Board, Low Carbon Fuel Standard Quarterly Data Spreadsheet. CARB, accessed 28 February 2023, https://ww2.arb.ca.gov/resources/
documents/low-carbon-fuel-standard-reporting-tool-quarterly-summaries
20 California Air Resources Board, Lookup Table Pathways: Technical Support Documentation, CARB, 21 February 2023, pp11, https://ww2.arb.ca.gov/sites/default/les/
classic/fuels/lcfs/ca-greet/lut_update_2023_2.pdf
21 TRC analysis of US Energy Information Administration. January 2024 Monthly Energy Review. Table 10.4a, Biodiesel Overview, 29 January 2024. Data does not specify end
use sectors but it is generally accepted that the majority of BD is used in on-road transportation.
22 California Air Resources Board, Low Carbon Fuel Standard Quarterly Data Spreadsheet. CARB, accessed 28 February 2023, https://ww2.arb.ca.gov/resources/
documents/low-carbon-fuel-standard-reporting-tool-quarterly-summaries
All opinions in the above Industry Perspective represent the opinion of the aforementioned organization and do not
reect the opinions of TRC Companies, Inc. (TRC) or the report sponsors.
State of Sustainable Fleets 2024 Market Brief 29
23 Melvin, Jasmin. US EPA ‘lowers ambitions’ to chagrin of biofuel producers in nal RFS rule for 2023-2025. S&P Global Commodity Insightsl, 21 June 2023,
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/062123-us-epa-nalizes-biofuel-blending-mandates-for-next-three-
years#:~:text=The%20nal%20rule%20requires%20reners,22.33%20billion%20gallons%20in%202025
24 Neste Corporation. Neste Partners With Hightowers Petroleum To Provide Renewable Diesel To Customers In The Midwest. Biomass Magazine, 22 November 2023,
https://biomassmagazine.com/articles/neste-partners-with-hightowers-petroleum-to-provide-renewable-diesel-to-customers-in-the-midwest
25 Neste Corporation. Neste partners with Coleman Oil Company making renewable diesel widely available in Washington. American Journal of Transportation, 11
December 2023, https://www.ajot.com/news/neste-partners-with-coleman-oil-company-to-make-renewable-diesel-more-widely-available-in-washington-state
26 S&P Global Mobility, December 2023 long-term outlook. These estimates are based on analysis for the entire transportation market, not exclusively demand from
commercial \medium- and heavy- duty vehicles.
27 TRC analysis of US Energy Information Administration. January 2024 Monthly Energy Review, Tables 2.5, 10.4a and 10.4b, 29 January 2024. https://www.eia.gov/
totalenergy/data/monthly/index.php#renewable
28 U.S. Department of Agriculture (USDA). Higher Blends Infrastructure Incentive Program. USDA, https://www.rd.usda.gov/sites/default/les/fact-sheet/508_rd_factsheet_
hbiip.pdf
29 U.S. Department of Agriculture (USDA). USDA Invests $2.2 Million To Expand Renewable Fuels At Ethanol Plant In Iowa. Ethanol Producer Magazine, 9 November 2023,
https://ethanolproducer.com/articles/usda-invests-22-million-to-expand-renewable-fuels-at-ethanol-plant-in-iowa
30 Cummins Inc. Cummins and Chevron advance strategic collaboration. Cummins Newsroom, 10 August 2023, https://www.cummins.com/news/releases/2023/08/10/
cummins-and-chevron-advance-strategic-collaboration
31 Optimus Technologies. Immediate Decarbonization of Class 8 Trucking: A 1.3 million-mile evaluation of 100% Biodiesel. 2022.
32 Chevron Renewable Energy Group calculations based on CA-GREET Model, email with TRC, 17 April 2024.
33 Colin Huwyler, Founder & CEO, Optimus Technologies, interview with TRC, 19 January 2024.
34 Adam Buttgenbach, Director of Fleet Engineering and Sustainability, PepsiCo., interview with TRC, 9 February 2024
35 ClearFlame Engine Technologies. ClearFlame TCO and Emissions Study, 19 June 2022.
36 ClearFlame Engine Technologies. ClearFlame Engine Technologies Sells First Truck to Vander Haag’s Inc. PR Newswire, 17 January 2024, https://www.prnewswire.com/
news-releases/clearame-engine-technologies-sells-rst-truck-to-vander-haags-inc-302036612.html
37 Engine Technology Forum. Trucking. 2023, https://enginetechforum.org/trucking
38 California Air Resources Board. Advanced Clean Trucks Fact Sheet. CARB, 20 August 2021, https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-trucks-
factsheet
39 Environmental Protection Agency. Final EPA Standards for Heavy-Duty Vehicles to Slash Dangerous Pollution and Take Key Step Toward Accelerating Zero-Emissions
Future. EPA, 20 December 2022, https://www.epa.gov/newsreleases/nal-epa-standards-heavy-duty-vehicles-slash-dangerous-pollution-and-take-key-step
40 Volvo Trucks. Volvo Trucks Unveils All-New VNL in North America. Volvo Trucks, 23 January 2024, https://www.volvotrucks.com/en-en/news-stories/press-
releases/2024/jan/volvo-trucks-unveils-all-new-volvo-vnl-in-north-america.html
41 Cummins, Inc. Cummins Unveils Industry-First Fuel-Agnostic Internal Combustion Powertrain Solutions, Helping Fleets Decarbonize Today with Low-Carbon Fuels.
Cummins, 14 February 2022, https://www.cummins.com/news/releases/2022/02/14/cummins-unveils-industry-rst-fuel-agnostic-internal-combustion
42 Heid, Bernd, Christopher Martens & Anna Orthofer. How Hydrogen Combustion Engines can Contribute to Zero Emissions. McKinsey & Company, 25 June 2021, https://
www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-hydrogen-combustion-engines-can-contribute-to-zero-emissions
43 Klein, Tammy. The Benets of Renewable Bio-Based Diesel Fuels. Transport Energy Strategies, October 2023, https://enginetechforum.egnyte.com/dl/QADLBsYu/ETF_
Renewable_Diesel_HVO_White_Paper_by_Transport_Energy_Strategies_October_2023.pdf
44 Voegele, Erin. EIA: Renewable Diesel Production to Expand by 30% Annually in 2024, 2025. Biodiesel Magazine, 6 February 2024, https://biodieselmagazine.com/
articles/eia-renewable-diesel-production-to-expand-by-30-annually-in-2024-2025
45 Webinar. Environmental Benets of Medium- and Heavy- Duty Zero Emission Vehicles Compared with Clean Bio- and Renewable- Fueled Vehicles 2022 – 2032. Engine
\Technology Forum, 21 July 2022, https://enginetechforum.org/webinars/posts/best-strategies-to-reduce-emissions-from-mediumheavy-duty-vehicle
State of Sustainable Fleets 2024 Market Brief 30
PROPANE VEHICLES
Propane prices remain low, attracting rural bus and delivery eets.
The average price of propane autogas, also known as liquied petroleum gas (LPG), declined for most
eets in 2023 with continued support from the Alternative Fuel Tax Credit (AFTC), which was extended in
2022. Propane’s reliably low price continued to generate fuel cost savings even with the lower price of
diesel and gasoline. The price averaged $1.71 per gasoline gallon equivalent (GGE) for private retail, the
most common fueling approach among LPG-using eets, compared to $3.58 per gallon of gasoline at
public stations. The AFTC provides a tax credit of $0.36 for propane along with a 30% tax credit or up to
$10,000 for fueling infrastructure investments through the end of this year. Efforts are underway to extend
the credit again beyond the end of 2024.
TENS OF THOUSANDS THOUSANDS
Estimated Medium- and Heavy-Duty Vehicles in Operation
DELIVERY SCHOOL SHUTTLE MUNICIPAL PUBLIC UTILITY
THE FLEET TYPES LEADING PROPANE VEHICLE ADOPTION
Fleets leading adoption of MD and HD propane vehicles and approximate vehicles in operation.
USPS mail contractor is using its fuel savings from
replacing diesel trucks with six LPG trucks to
achieve a 50% propane eet. It reported that its
initial six LPG trucks are expected to yield $25,000
in fuel savings and $15,000 in maintenance
savings annually.2 One Indiana school district
announced plans to buy its rst 33 LPG-powered
Several school and delivery eets pointed to
these fuel cost savings for propane as critical
to their businesses. Allegan County, Michigan,
expects that its municipal transit LPG-powered
vehicles will save the county 50% on fuel costs,
while also achieving up to 70% savings on
maintenance costs.1 In New Hampshire, one
State of Sustainable Fleets 2024 Market Brief 31
buses in order to reduce its fuel costs by up
to 50%, as well as create a cleaner, quieter
operating prole.3 Manufacturers note that the
nancial advantage of propane operations
remains a strong pull for publicly funded eets
and independent contractors. This is expected
to last for the foreseeable future as eets
navigate emissions mandates and the cost and
availability of ZE solutions remain out of reach for
many.
Renewable propane supplies
remain elusive for most eets
Renewable propane (rLPG) makes up a small
share of the U.S. propane supply, and the share
sold to on-road eets is even smaller. Only three
out of the 30 surveyed eets that used pro-
pane-powered vehicles in 2023 used rLPG. In
those rare cases, adoption is often driven by
local access or strong sustainability targets. For
example, Beaverton, Oregon’s school district is
a rare adopter that has been using rLPG in some
of its vehicles as one of several emissions-cutting
strategies.
Competition and cost are the largest limiting
factors for rLPG distribution to on-road eets.
Currently, most rLPG is produced as a byproduct
of production for RD and sustainable aviation
fuel, two low-carbon renewable fuels with strong
and growing demand in transport applications.4
While the current growth in these fuel markets will
increase the domestic production of rLPG, this
byproduct is frequently used in any industrial and
fuel rening activities taking place in the same
or adjacent facilities. Industry experts and eets
generally agree that the preparation, transpor-
tation, and distribution fees required to sell the
byproduct as vehicle-ready fuel eliminate much
of the fuel cost savings that are conventional
propane’s biggest advantage over gasoline,
diesel, and other low-carbon alternatives.5 A few
eets navigate this issue by purchasing rLPG/LPG
blends. In May 2023, Bonny Eagle School District
in Maine became the rst school eet to use
rLPG east of the Rockies with a 5% rLPG/95% LPG
blend.6 As reported last year, renewable dimeth-
yl ether (rDME) offers a distant alternative to rLPG
but only as a blending fuel under current regula-
tion. Producers note that most rDME is currently
sold to forklift eets, and vehicle eets are not
currently considered a major market.7
The average price of
propane autogas declined
to $1.71 per GGE in 2023,
supported by the Alternative
Fuel Tax Credit, continuing to
attract rural bus and delivery
eets with signicant cost
savings over gasoline.
“Propane buses have saved
the district thousands of
dollars in terms of fuel cost
and maintenance costs. In
my experience, propane
engines are an ideal t
for the stopand-go school
bus operations, especially
in the colder climates we
experience in Nebraska.”
– Richard Casey, Director of
Transportation, Bellevue Public
Schools, Nebraska
State of Sustainable Fleets 2024 Market Brief 32
SIDEBAR: WHERE IS THE RENEWABLE PROPANE?
Use rates of rLPG by eets are low at 10% of surveyed propane users, or three eets. Additionally, most
surveyed propane users either have not yet asked their provider about access to rLPG (27%) or did not
respond to the question (57%). Some eets noted that they use propane in only a small share of their
vehicles, and that the potential benet of a renewable variation does not justify the cost and effort
of pursuing it. However, 90% of surveyed eets that currently operate vehicles powered by propane
would use rLPG if it was accessible at a competitive price. If renewable propane is to be successful as a
decarbonization solution, the industry will need to develop a viable production pipeline for affordable
fuel and raise eet awareness.
Fleets have MY2027-
compatible options while
Cummins holds B6.7N release
Since beginning development of a robust
propane version of its B6.7 engine with a
multimillion- dollar investment from the Propane
Education & Research Council (PERC), Cummins
has continued to investigate market viability
for fuels on this platform, including gasoline.8
Pointing to the substantial changes in emissions
regulations that are underway in California and
at the EPA, Cummins expects that its potential
release of the B6.7 for gasoline, propane, or
other fuels will follow release of its larger volume,
compliant engines. Stakeholders speculate that
engine and vehicle manufacturers are paying
scant attention to the propane market while
navigating the high-prole landscapes of natural
gas, battery, and hydrogen technologies.
This delay has limited but not eliminated the
propane engine options for eets seeking
affordable, emissions-reducing solutions in
the MD segment. In 2023, ROUSH CleanTech’s
ultra-low NOx propane engine package was
certied by EPA and CARB to meet the MY2024
engine standard, and it is expected to comply
with the MY2027 engine standard.9 ROUSH
previously offered this package for an added
“We would like to see more advancement in rLPG + rDME as a bridge
fuel to the EV and hydrogen future. As a drop-in, rLPG has the potential to
support our carbon reduction goals with minimal impact to our day-to-day
operations, particularly in locations where the local grid’s CI remains high
or where our route ranges exceed EV’s capabilities.”
– Eric McCann, Director of Fleet Sustainability and Technology,
Bimbo Bakeries USA, Ohio
Only three out of the 30
surveyed propane vehicle
users had access to
renewable propane in 2023,
largely due to high distribution
costs that undermine propane’s
cost advantage over other
lowcarbon fuels.
State of Sustainable Fleets 2024 Market Brief 33
cost but recently standardized it for every
propane engine sold. Nearly half of the sales for
this ROUSH system are incorporated into school
buses.
Engine modiers have historically played a large
role in the propane vehicle sector where many
eets use aftermarket upts. In 2023, Hino Gas
and 2Fuel Technologies began collaborating on
propane conversion kits for MD and HD vehicles
in multiple global markets, but the commercial
timeline was not advertised.10 Alliance AutoGas
received EPA certication on its kit for the
Ford 7.3L engine to meet the MY2024 engine
standard. The company is working to drive
adoption by fuel retailers, a segment that some
consider the most obvious adopters and industry
advocates for propane-powered vehicles.11
Appetite for propane picks
up in the yard truck sector as
school bus options narrow
School bus eets were the only operators
putting new factory-built propane vehicles on
the road in 2023. Data shows that school bus
eet demand for these vehicles recovered
after a brief dip in 2021 but remains below
pre-pandemic levels.12,13 Most non-school bus
propane vehicles are classied as aftermarket
products, making annual vehicle sales and
registrations difcult to track. However, leading
vendor ROUSH CleanTech observed that
deployments of vehicles serving applications
“Pittsburg USD has benet-
ed from the use of propane
in our school bus eet. The
propane was readily avail-
able and more cost effective
than diesel. The performance
has been pretty close overall,
with very little down time.”
– Matthew Belasco, Director of
Maintenance, Operations, and
Transportation, Pittsburg Unied School
State of Sustainable Fleets 2024 Market Brief 34
such as paratransit and delivery grew
approximately 20% year-over-year as the
industry cleared supply chain bottlenecks, such
as access to chassis, which slowed production in
2022.14
While school buses have long been a strong
t for propane, established manufacturers
ThomasBuilt and IC Bus dropped these options
from their portfolio in 2023, reducing buyers’
options to one manufacturer. That producer,
Blue Bird, observed that market shrinkage tends
to delay purchases as customers adjust their
specs.15 Representatives also commented that
the drop in propane bus sales was not offset by
an equivalent rise in battery-electric bus sales
and added that economics are directing eets’
attention to the lowest cost option of gasoline.
Ford’s 7.3L engine is familiar and supports Class 6
and 7 bus operations with gasoline but can also
use propane when paired with ROUSH’s system.
As buyers prepare to meet the EPA’s MY2027
engine standard, Blue Bird expects to see
propane sales rise thanks to ROUSH’s product,
which is expected to comply. PERC and ROUSH
added that as diesel bus costs rise ahead of
2027 (see Diesel chapter), the $5,000-7,000
incremental cost of a propane vehicle will likely
shrink, making it more attractive.16
A few cargo-handling eets are exploring
propane as an operationally viable and
affordable pathway to emissions reductions.
PERC notes that more than a dozen yard trucks
were delivered to or in use by port operators on
the East and West Coasts in 2023, and trusted
manufacturers MAFI, TICO, and Autocar are
taking orders.17,18 These models are available with
the PSI 8.8L propane engine but are designed
to use the Cummins engine once it is available.
Performance data has not been released,
but this remains an application to watch as
eets navigate emissions standards, regulatory
mandates, and shipper and retailer supply chain
sustainability targets.
Results from this year’s annual survey suggest
that eet demand for propane vehicles (both
factory-built and aftermarket-sourced) will
hold steady or grow in some segments while
decreasing in others during the next two years.
Approximately 40% of surveyed propane vehicle
operators expect use to hold steady, while 27%
expect use to decrease and 33% expect use to
increase. Most eets that expect use to increase
are in the school bus segment, while most eets
that expect use to decrease are in the public
shuttle and/or municipal segments.
These industry dynamics suggest uctuations
in annual demand and shifts in the leading
adopter segments for the next few years until
MY2027, when new emissions standards will
render propane vehicles even more price
competitive.
The reduction in propane school
bus options by established
manufacturers in 2023 has
concentrated the market,
with Blue Bird remaining
committed and expecting
a rise in propane bus
sales with the impending
MY2027 standards.
Survey results indicate
steady or growing demand
for propane vehicles in
some segments through
MY2027, with school bus
eets likely to drive increased
adoption due to competitive
pricing against rising diesel costs.
State of Sustainable Fleets 2024 Market Brief 35
INDUSTRY PERSPECTIVE – PROPANE EDUCATION &
RESEARCH COUNCIL (PERC)
For more than a century, propane autogas has
served as a clean-burning, affordable, locally
sourced, and reliable transportation fuel that
displaces use of gasoline and diesel. Over the
last decade, propane use in medium- and
heavy-duty applications has grown, especially
in Class 3-7 markets that include paratransit
vehicles; package, food, and beverage delivery
trucks; and the school buses.
More importantly, today propane autogas is
the leading clean energy alternative to diesel
in student transportation, with 22,000 propane
buses on the road in more than 1,000 school
districts across 48 states. Each day, this national
propane-powered school bus eet delivers
safe and healthy rides for more than 1.3 million
students. As part of the NZE alternative fuel
options available for funding in the EPA’s Clean
School Bus Program, propane autogas school
buses offer signicant emissions reductions at a
fraction of the cost of battery-electric models.
The environmental benets of medium- and
heavy-duty propane engines have steadily
improved to meet regulations. Today’s ultra-low
NOx propane autogas engines are certied to
0.02 g/bhp-hr; this “near-zero-emissions” (NZE)
performance exceeds even the newest EPA
guidelines for MY2027+ vehicles. In addition to
reducing NOx emissions, these engines reduce
GHG and particulate matter emissions while
providing powerful and reliable energy. The
upshot is that propane is an NZE alternative fuel
option available for funding in the EPA’s Clean
School Bus Program. These school buses offer
signicant emissions reductions at a lower cost
than battery-electric models.
Affordability and cost effectiveness are
key benets that propane vehicles offer to
eets. The total cost of ownership (TCO) for a
propane eet, including vehicles and fueling
access, is available at a fraction of the TCO
for comparable gasoline or diesel eets. This
is due to a compelling combination of low
fuel, maintenance, and infrastructure costs.
Moreover, according to the U.S. DOE, propane is
available to eets at nearly 2,000 public access
stations across the nation, and eets can install
private stations quickly and at relatively low
cost at any location. Propane provides eets
with an affordable and scalable approach to
achieving key environmental benets by using
a clean-burning, widely available alternative
transportation fuel.
Emerging propane vehicle technology can also
help enable America’s gradual electrication
of its on- and off-road transportation sectors.
Propane engines are conducive to hybridization
with efcient electric drivetrains that can
include plug-in architectures. Innovative
industry stakeholders are working on portable
recharging solutions that can use low-emission
propane-powered generators — and in some
cases alongside wind and solar power — to
recharge EVs independently of the electric grid.
Propane-powered recharging solutions (either
temporary or long-term) can enable DC fast
charging whenever and wherever it is needed.
This emerging technology is applicable toward
available grant dollars via the Infrastructure
Investment and Jobs Act.
State of Sustainable Fleets 2024 Market Brief 36
Renewable propane (rLPG) offers eets the
same benets as conventional propane —
reliability, portability, and power — but with the
added benet of ultra-low GHG emissions when
compared to petroleum-based transportation
fuels. This low-CI fuel (about 66% lower than
conventional gasoline and diesel) can be
made from a variety of renewable feedstocks,
including camelina plant oil, vegetable oil,
animal fats, used cooking oil, soybean oil, and
animal tallow. Currently, more than 4.5 million
gallons of rLPG are produced in the U.S. every
year. Within the next few years, the industry
expects annual rLPG production to rise to 100
million gallons and potentially reach 300 million
gallons in the next decade. In fact, by 2050,
rLPG could meet half the world’s demand for
nonchemical propane, according to the World
LP Gas Association.
To achieve America’s decarbonization goals,
it will take a variety of clean energy sources
working together in the applications for which
they are best suited. On the wide path to zero
harmful emissions (smog precursors and GHGs),
propane-fueled engines will continue to play an
important role in delivering reliable, affordable,
and ultra-low-emitting power for transportation
applications. As the transition from conventional
to renewable propane continues and grows,
eet owners will have an affordable means to
reduce their carbon and overall environmental
footprints while providing safe and reliable
transportation of people and goods.
All opinions in the above Industry Perspective represent the opinion of the aforementioned organization and do not reect the opinions of TRC
Companies, Inc. (TRC) or the report sponsors.
1 Lovrak, Tess. Allegan County Transportation switches to propane transit buses. Fleet Equipment, 11 September 2023, https://www.eetequipmentmag.com/
allegancounty-transportation-propane-transit-buses/
2 Bates, Michael. DDA Transport Begins Adopting Autogas Trucks. NGT News, 13 November 2023, https://ngtnews.com/dda-transport-begins-adopting-propane-
autogastrucks
3 O’Connor, Erin. Indiana School District Adds 33 Propane Autogas Buses to Fleet. NGT News, 11 October 2023, https://ngtnews.com/indiana-school-district-adds-33-
propane-autogas-buses-to-eet
4 Alternative Fuels Data Center (AFDC). Propane Production and Distribution. AFDC, https://afdc.energy.gov/fuels/propane-production
5 Jeremy Wishart, Director of Technical Communications, Propane Education & Research Council, interview with TRC, 4 January 2024.
6 Propane Gas Association of New England. Renewable Propane Debuts in Maine. Pitstop, 16 May 2023, https://www.pitstopfuels.com/renewable-propane-debuts-
inmaine/
7 David Mann, Oberon Fuels, VP of External Affairs, email interview with TRC, 22 December 2024.
8 Tom Swenson, Director of Global Regulatory Affairs, Cummins Inc., interview with TRC, 3 January 2024. Jeremy Wishart, Director of Technical Communications, Propane
Education & Research Council, interview with TRC, 4 January 2024.
9 Richesson, Brian. Roush CleanTech standardizes ultra-low NOx engine package. LPGas Magazine, 23 May 2023, https://www.lpgasmagazine.com/roush-
cleantechstandardizes-ultra-low-nox-engine-package/
10 Sandrick, Bob. LPG Spotlight: Hino Gas. LPGas Magazine, 23 October 2023, https://www.lpgasmagazine.com/lpg-spotlight-hino-gas/
11 Kriz, Ellen. Alliance AutoGas earns certication for heavy-duty Autogas system. LPGas Magazine, 22 April 2023, https://www.lpgasmagazine.com/alliance-autogas-
earnscertication-for-heavy-duty-autogas-system/
12 State DMV registration data does not include vehicles uptted by third parties to operate on dedicated or bi-fuel propane engines. Uptted vehicles constitute the vast
majority of the non-school bus vehicle population. Previous versions of this report have reported sales gures disclosed by industry partners and OEMs but these were
not available for this report.
13 TRC analysis of new vehicle registration data provided by S&P Global Mobility.
14 Todd Mouw, Executive Vice President, ROUSH CleanTech, email interview with TRC, 11 March 2024.
15 Albert Burleigh, Vice President of Alternative Fuels, Blue Bird Corporation, interview with TRC, 21 December 2023.
16 Range provided by ROUSH CleanTech.
17 Bunsey, Jim. Powering Ports with Alternative Energy Source: Propane. Maritime Logistics Professional, 21 September 2023, https://www.maritimeprofessional.com/news/
powering-ports-with-alternative-energy-388165
18 Jeremy Wishart, Director of Technical Communications, Propane Education & Research Council, interview with TRC, 4 January 2024.
State of Sustainable Fleets 2024 Market Brief 37
TENS OF THOUSANDS THOUSANDS
Estimated Medium- and Heavy-Duty Vehicles in Operation
PUBLIC UTILITY MUNICIPALCARGOTRANSITLONG-HAUL REGIONALREFUSE
Fleets leading adoption of MD and HD CNG vehicles and approximate vehicles in operation.
THE FLEET TYPES LEADING CNG VEHICLE ADOPTION
NATURAL GAS VEHICLES
RNG drives domestic supply growth, prices climb but remain
competitive.
RNG producers opened more than 150 new facilities while maintaining a queue of at least 300 projects
in 2023, sustaining a growth trajectory.1 The American Biogas Council identied 2023 as a record year
for biogas production and noted that 91% of the natural gas projects that came online in the year
produced RNG.2 Independent analysis estimates that approximately 175 RNG production facilities in the
U.S. will become operational between mid-2023 and late 2024.3 The nancial outlook is strong: Projects
in the agricultural sector, such as dairy digesters, are reportedly driving down production costs, while
carbon credit revenue streams under the federal Renewable Fuel Standard (RFS) and state-based
carbon credit programs continue to improve affordable access to this ultra-low carbon fuel for eets.
Data from California’s Low Carbon Fuel Standard (LCFS) program shows that eets are further beneting
from RNG’s remarkably low CI value, an industry standard measure of lifecycle GHG emissions. In
2023, the average CI reported in California’s LCFS program was -119 gCO2e/MJ, an approximate 21%
improvement from the prior year’s value of -98 gCO2e/MJ.4,5 This continues a multi-year trend reported
in previous years of State of Sustainable Fleets of RNG’s plummeting CI due to the growing supply of
carbon-negative biogas from dairy and swine manure used in California transportation.
State of Sustainable Fleets 2024 Market Brief 38
Natural gas prices rose but remained
competitive in 2023, averaging 50% less than
diesel on a dollar per diesel gallon equivalent
basis. Average annual retail prices rose 11% from
$2.73/DGE to $3.04/DGE, while private prices
had a slightly larger 13% increase from $2.36/
DGE to $2.66/DGE.6 Prices from private contracts
negotiated directly with fuel providers or private
stations can be far lower. While the Alternative
Fuel Tax Credit (AFTC) of $0.50/DGE and the
Investment Tax Credit (30% of municipal solid
waste production equipment) remained in play,
additional federal incentives are lining up to
stimulate eet sales going forward.7 In 2025, the
Clean Fuel Production Tax Credit will provide
an additional $0.20-$1/DGE for CNG produced
and delivered to the non-aviation transportation
market. Meanwhile, the RNG Incentive Act
(HR2488) has made a reappearance. Originally
proposed in 2022, it resurfaced in 2023 and was
awaiting action in the House as of the writing of
this brief. Collectively, these trends suggest that
natural gas will remain a fairly stable and price-
competitive vehicle fuel.
“We continue to see renewable
natural gas vehicles as the best
current solution to meet range,
fueling, and emissions
reduction requirements.”
– Matt Harris, Sustainability Area
Manager, Wegmans Food Markets,
New York
RNG producers opened
more than 150 new facilities
in 2023, contributing to a record
year in which 91% of new natural
gas projects generated RNG with
another 175 projects expected to
come online by year-end.
Fleet demand for natural gas
grows again, concentrated
among existing users
Fleet demand for natural gas fuel grew for the
third year in a row but at a slower rate. Total
consumption by California eets, the U.S.’s
largest market for natural gas as a transportation
fuel, grew 18% and then 13% in the prior two
annual cycles, but average consumption in
each of the rst three quarters of 2023 increased
only 8% year-over-year.8
Results from this year’s eet survey suggest that
RNG use is becoming more concentrated. Less
State of Sustainable Fleets 2024 Market Brief 39
than half of the eets that operated natural gas
vehicles (NGVs) in 2023 fueled their vehicles
with RNG, down from 69% in the previous year.
However, the eets that purchase RNG used
more of it in their vehicles on average than in the
previous year. The average NGV eet used RNG
for 70% of their fueling needs by volume in 2023,
up from 46% the prior year. This suggests that the
eets for which NGVs are long-term best ts are
using more RNG while the eets using NGVs as
one of several fuel technology platforms may
be moving away from this technology. Survey
results show that RNG was particularly popular
in refuse and goods movement eets, two
duty cycles that can be particularly tricky to
electrify. Some refuse eets have the additional
advantage of local fuel sources supporting their
decarbonization goals. In 2023, leading eet WM
opened an RNG production facility at one of
its landlls in Arkansas, one of 17 such facilities it
operates in North America, and will use a share
of the fuel in its own vehicles.9,10
NGV outlook remains strong
despite drop in vehicle
deliveries
Fleets took delivery of 11% fewer NGVs in 2023
than in 2022, although a close analysis suggests
that use remains strong — and could grow
— in best-t applications.11 The Class 8 tractor
segment saw the sharpest decline in new vehicle
deliveries (20%), however, this was a noticeably
less severe drop than the prior year (35%).12 The
majority of new NGV deliveries were made to
eets in refuse (33%) and general freight (29%)
vocations, where demand is expected to grow
in the coming years. Meanwhile, transit deliveries
saw a 7% decline, the second drop in as many
years, ending a very steady annual sales market
between 2018 and 2021. Declines in these two
leading NGV segments were offset by a surge
in NGV school buses. Much of this was driven
by Blue Bird, which was selling inventory before
discontinuing its natural gas school bus offering
in 2024. Therefore, it is unlikely that this surge
represents a new normal for the school eet
segment.
New technology and improved access to low-
carbon fuel may grow NGV adoption in the next
several years. Of the existing NGV eets surveyed
for this assessment, 81% expect their use to either
increase (42%) or hold steady (39%) between
2024 and 2026. The public sector remains a
leading adopter with a strong outlook, with 45%
of these eets reporting NGV use in 2023, and all
expect use to remain steady or grow. NGV use
is highest for refuse service. Use of natural gas in
“Having CNG at our fueling
station has been a great choice
for our city. Maintenance costs
are a great deal cheaper
because of extended time
between performing preventive
maintenance. Plow trucks have
performed as well with CNG as
they do with diesel fuel — huge
savings in fuel cost.”
– John Hyatt, Fleet Manager, City of
Dublin, Ohio
Fleet demand for natural gas
grew modestly in 2023, with
an 8% year-over-year
increase in consumption
among eets in California,
one of the largest NGV user
markets.
State of Sustainable Fleets 2024 Market Brief 40
refuse and goods movement sectors is likely to
persist thanks to their strong t and performance
in services that are otherwise challenging to
electrify.
Fleets’ NGV growth goals may be frustrated by
several market headwinds. As ZEVs become a
mandated standard in a growing number of
states, eets face real deadlines for phasing out
their combustion engine operations in some of
the country’s largest vehicle markets. Some HD
eets that have relied on the ISX12N engine from
Cummins face a purchasing gap. This engine
was discontinued in California in 2024 and
Cummins is phasing it out globally as it prepares
to begin producing its new 15-liter engine in
Q3 2024. Early test results are promising, but the
timeline introduces a 1.5- to 2-year purchasing
gap for many buyers. Stakeholders debate
whether some customers in regulated markets
will shift their attention and resources to ZEVs in
the interim. However, eets have the assurance
that incumbent, trusted manufacturers will be
using the X15N in the models that eets favor.
PACCAR’s Peterbilt sold more NGVs in 2023
than any other OEM, and it was also one of the
rst vehicle OEMs to commit to Cummins’ new
engine.13,14 In late 2023, Freightliner announced
that it would also offer the new engine.15 With
the MY2027 rules likely increasing the cost and
complexity of diesel vehicles and the signicant
cost savings and reliability that CNG engines
offer, Cummins and these OEMs are betting that
eets will increasingly turn to NGVs.
S&P Global Mobility is also bullish on the future
of NGVs. It forecasts a strong (63%) growth in
vehicle sales by 2030 relative to the 2023 U.S.
market, or 13,000 vehicles, with 11,500 being
Class 8 trucks.16 It attributes this growth to the
availability of new engine products and a
growing number of eets that are not subject to
state ZEV mandates but nonetheless seek deep
emissions cuts.
“We converted our entire bus
eet to CNG. Today, 521 buses
are low-emissions engines
and 41 are near-zero engines.
100% of DART’s CNG bus eet
now uses RNG.”
– Darryl E. Spencer, Vice President, Dallas
Area Rapid Transit
State of Sustainable Fleets 2024 Market Brief 41
Kenworth and Peterbilt, have publicly stated
intent to offer the X15N in their lineup, although
Cummins reports that several other major brands
are considering it.20,21,22 Dealerships and industry
representatives consulted this past January
commented that eets’ pent-up demand could
create long lead times on new orders, although
Cummins’ latest (Q2 2024) assertion of full
production before year-end may alleviate these
concerns. Even so, appetite for NGVs is shifting.
A sizeable share of NGV users in the annual
survey indicate their intent to shift away from
CNG altogether (38%).
Cummins acknowledges that the market
for combustion engines during the next two
decades will be increasingly limited to states
that have not adopted California’s ACT rule,
particularly while ZE vehicle production remains
low.23 Still, Cummins’ investment in the X15N is
reportedly its largest ever in natural gas, and the
company is investing big and positioning the
engine for long-term success.
Cummins’ X15N begins eld
trials, commercial product
expected in 2025
Engine manufacturer Cummins began putting
its new 15-liter natural gas engine, the X15N,
through eld trials with current and prospective
customers. Walmart ran ve units on an Indiana-
to-California route mapped to Chevron’s RNG/
CNG fueling stations, marking the retailer’s rst
NGV deployment.17 Logistics eet Knight-Swift is
running a pilot using RNG in Southern California
through 2024.18 These and other demonstrations
inform Cummins’ development of an engine
that it intends to support a wider range of heavy-
duty applications than its 12-liter predecessor.
Company representatives point to the lighter,
larger, and stronger design that opens
opportunities for weight-limited eets and an
improved maintenance schedule that can help
reduce costs. They add that it is also expected
to meet the EPA’s MY2027 standard for engines.
Cummins expects to see its HD natural gas
engine sales grow by at least three-fold and
plans to release a replacement for the current
9-liter model shortly after to meet the needs of
bus and MD truck eets.19 Beyond natural gas,
the engine’s core architecture will provide the
basis for future offerings that are compatible with
other fuels, including hydrogen.
While pilot eets are reportedly enthusiastic,
some prospective customers have expressed
concerns with the slow timeline and limited OEM
uptake. Only three manufacturers, Freightliner,
“CNG has been an
excellent decision for our
sanitation eet. Decreased
down time. Reliable fuel.
Quiet trucks with far lower
emissions.”
– City of Olathe, Josh Wood,
Fleet Manager, Kansas
Despite a drop in NGV deliveries
in 2023, the outlook remains
strong, with S&P Global Mobility
predicting 63% growth in
vehicle sales by 2030.
State of Sustainable Fleets 2024 Market Brief 42
Emissions Type
Electric
Grid
Linear
Generator
(RNG)
Linear
Generator
(CNG)
Conventional
Generator
(CNG)
Conventional
Generator
(Diesel)
GHG (CI) -20% -273% -7% 43% 48%
NOx -100% -86% -86% 1563% 2969%
RNG
CNG
CNG
SIDEBAR: WILL LARGER ENGINES POWER GROWTH?
Only 7% of surveyed eets using NGVs today plan to grow their eet signicantly when Cummins’ larger
engine is introduced, while 34% plan for modest growth. Another 22% expect their NGV eet size to hold
steady by transitioning their current NGV purchases to the larger 15L engine. Meanwhile, a sizeable share
of surveyed NGV users are shifting away from CNG altogether (38%). Notably, growth forecasts, such
as those by S&P Global Mobility, Cummins, and others, assume strong uptake from eets that have not
historically led adoption. These ndings don’t foretell how many vehicles may be purchased or phased
out of service without replacement, and Cummins’ strong bet on a new customer base makes forecasts
difcult to validate. Purchasing activity beginning in late 2024 and through 2026 will be an important
trend to watch.
Suppliers nding new markets
in infrastructure gaps for EVs
New, breakthrough technology opened a
surprising market for natural gas in the past few
years — HD EV eet charging. Delays in service
connections from electric utilities opened
opportunities to use natural gas–fueled linear
generators from Hyliion and Mainspring to
charge battery-electric Class 8 trucks.24,25 Linear
generators are new products with limited real-
world performance data, but manufacturer
specications and early deployment results
indicate that they can produce electricity
with fewer emissions, less noise, and greater
efciency than conventional diesel and natural
gas generators.26 In some areas of the U.S., these
generators, when paired with a low-carbon
fuel such as RNG, can produce electricity
with a lower CI value than the electrical grid.
Independent analysis summarized in Table
1 suggests that charging a Class 8 truck on
equipment powered by linear generators
can achieve signicant emissions reductions
compared to charging on grid-connected
equipment depending on the fuel used.27
This analysis also nds that linear generators can
help eets reduce their fuel costs. On a fuel cost-
per- trip basis, grid-charged BEVs can be nearly
50% less expensive than diesel trucks; charging
with power produced by natural gas-fueled
linear generators can be 10% cheaper. Multiple
factors contribute to whether linear generators
can be a cost-effective and emissions-efcient
solution for any given eet, and several factors
remain unknown while technologies are in early
commercial stages. Whether this represents
a meaningful intersection for low- and zero-
emission technologies in HD transportation will
depend on whether Hyliion, Mainspring, and
other companies successfully deploy their
products with more eets during the next few
years.
Table 1: Modeled differences in lifecycle NOx and GHG emissions footprints of a Class 8 battery-electric truck charged from ve different power sources and
performing 200-mile trips compared to a diesel truck baseline. “Lifecycle GHG emissions” describe the carbon intensity, or CI, of the fuel in a given operation. RNG
gures based on 2023 average CI on California’s LCFS market, adjusted for gas compression and methane slip. Electric gures based on California average grid mix.
State of Sustainable Fleets 2024 Market Brief 43
INDUSTRY PERSPECTIVE – THE TRANSPORT PROJECT
Commercial eets driving trucks fueled by RNG
can achieve a carbon-negative transportation
outcome today. Transitioning to RNG-fueled
trucks saves money, slashes emissions, and
deploys new, affordable, clean, and compliant
technology without delay and without
compromising business operations. More and
more eets are discovering just how RNG is
achieving better than zero results immediately.
New 15-Liter Technology
This year will see the production launch of
Cummins’s new 15L X15N engine, capping more
than six months of positive commercial trials by
multiple North American eets. The 15-liter joins
a suite of Cummins engines including the B6.7N,
L9N, and ISX12N. This engine is expected to
make signicant inroads into the Class 8 market,
giving natural gas a new ultra-competitive edge
in the space after dominating the transit, refuse,
and short-haul trucking alternative fuel markets
for years.
The successful launch of the 15-liter could see
annual natural gas vehicle sales grow by four
to ve times the current level, with a 50-100%
increase in fuel demand in just a few short
years. This projected growth could see NGV fuel
demand grow to greater than 2.5 billion gallons
annually in the next 10 years.28
State of Sustainable Fleets 2024 Market Brief 44
Most Cost Effective, Price Predictable
Sourced domestically, natural gas motor fuel is
less volatile to global market swings, providing
price stability and savings to eets of all sizes
compared to gasoline or diesel. The U.S.
Department of Energy Price Report indicates
that toward the end of 2023, the retail price of
compressed natural gas nationally was $1.30
less than the average for diesel fuel. In some
regions of the country, that price spread is
more pronounced with savings close to $2.50
per DGE.32 For eets with trucks that drive tens
of thousands of miles and consume signicant
gallons of fuel, this growing price differential
results in real savings.
Fleets contracting for RNG often see even
more savings as they can benet from
economic value associated with renewable
identication numbers (RINs). Under the U.S.
EPA’s Renewable Fuel Standard (RFS) Program,
RNG sales generate RINs that can be sold to
obligated parties (e.g. fuel marketers and eet
users), sometimes for several dollars per gallon
equivalent.
Incentives for RNG Motor Fuel
One of the most important nancial incentives
for natural gas vehicle owners has been the
$0.50/gallon Alternative Fuel Tax Credit (AFTC)
for natural gas transportation fuel. Fleets
interested in building their own fueling facilities
now also benet from the Alternative Fuel
Infrastructure Tax Credit, which, as a result of
the Ination Reduction Act (IRA), is now worth
$100,000 per qualifying piece of alternative fuel
refueling equipment. Many different federal
programs also continue to provide formula or
discretionary grant money for eets to purchase
natural gas transit and school buses and
alternative fuel infrastructure. Many programs
saw signicant increases in available funding
resulting from the passage of the Infrastructure
Natural Gas is an Ultra-Clean Fuel
Getting Even Cleaner
The carbon intensity of natural gas motor fuel
continues to decline. Derived from landll waste,
wastewater, forest waste, food waste, and
agricultural waste, RNG continues to make up
more and more of the natural gas motor fuel
market. In 2022, 69% of all natural gas used in
on-road transportation was RNG, up from 64% in
2021.29 Since RNG is interchangeable with any
NGV in either compressed or liqueed form, it is
one ultra-low-carbon/carbon-negative fuel that
does not require the build-out of new specic
infrastructure, since it is dispensed from existing
stations. Today, more than half of the truck-
capable natural gas fueling stations in the U.S.
solely supply RNG.
Data from CARB shows the average carbon
intensity of the bio-CNG mix sold in California in
Q3 2023 dropped to -132 gCO2e/MJ, the lowest
carbon intensity of any transportation fuel or
technology in the state.30
Carbon-negative RNG is increasingly available
nationwide, as more and more facilities harvest
and capture this gas — 311 production facilities
are in operation with 489 more in the planning
stages or under construction.31 Additional states
such as New Jersey, New Mexico, New York,
Michigan, Minnesota, and Pennsylvania are
looking to join California, Oregon, Washington,
and now New Mexico adopting clean fuel
standard programs, further incentivizing this
RNG buildout and the transition to cleaner
transportation fuels.
With an established and growing network of
public CNG stations dispensing RNG across North
America, eets looking to transition to clean
RNG trucks can likely avoid the overwhelming,
cost-prohibitive, multi-year refueling hurdles
currently plaguing other advanced clean fuel
technologies.
State of Sustainable Fleets 2024 Market Brief 45
Investment and Jobs Act (IIJA). Legislative
priorities moving forward include passage of the
Renewable Natural Gas Incentive Act (HR 2448),
which would provide a $1.00/gallon tax credit for
natural gas motor fuel derived from renewable
sources.33
Regulatory Outlook
RNG-fueled trucks of all sizes are EPA Clean Truck
compliant today. At 0.02 grams per horsepower
hour for NOx emissions, NGVs already meet the
upcoming stricter EPA standard of 0.035 g/hp-hr
required by MY2027. While uncertainty prevails
across so much of the regulatory landscape,
recent developments highlight likely upcoming
compliance opportunities.
Moves in the summer of 2023 to alter
implementation of California’s stricter Omnibus
emissions regulations and a year-end action
to pause certain aspects of the Advanced
Clean Fleet regulation demonstrate that the
state’s early, technology-specic goals will
not be achieved within its prescribed time
frames. Conversely, few issues exist regarding
NGV product availability and scalability, RNG
refueling accessibility, or the ability to meet more
demanding federal and state-specic standards.
Natural gas vehicles fueled by RNG offer a more
cost-effective, less disruptive yet still progressive
compliance schedule for commercial eets of all
shapes and sizes. RNG-fueled trucks allow eets
the ability to affordably comply today on their
road to achieving full carbon-neutrality.
All opinions in the above Industry Perspective represent the opinion of the aforementioned organization and do not reect the
opinions of TRC Companies, Inc. (TRC) or the report sponsors.
State of Sustainable Fleets 2024 Market Brief 46
1 TRC market analysis.
2 American Biogas Council. $1.8 billion was invested in new projects last year, according to numbers just released by the American Biogas Council. 13 February 2024,
https://americanbiogascouncil.org/third-year-of-record-growth-for-u-s-biogas-industry-expected-to-continue-in-2024/
3 TRC market analysis.
4 California Air Resources Board. Low Carbon Fuel Standard Quarterly Data Spreadsheet. CARB, accessed 28 February 2023, https://ww2.arb.ca.gov/resources/
documents/low-carbon-fuel-standard-reporting-tool-quarterly-summaries. Q4 2023 values are estimates based on the prior four quarters due to report publication
deadlines.
5 California Air Resources Board. Low Carbon Fuel Standard Quarterly Data Spreadsheet. CARB, accessed 28 February 2023, https://ww2.arb.ca.gov/resources/
documents/low-carbon-fuel-standard-reporting-tool-quarterly-summaries. Q4 2023 values are estimates based on the prior four quarters due to report publication
deadlines.
6 Alternative Fuels Data Center. Clean Cities Alternative Fuel Price Report. Table 13c, 2023 edition through October, https://afdc.energy.gov/les/u/publication/
alternative_fuel_price_report_october_2023.pdf
7 Alternative Fuels Data Center. Clean Cities Alternative Fuel Price Report. Table 13c, 2023 edition through October, https://afdc.energy.gov/les/u/publication/
alternative_fuel_price_report_october_2023.pdf
8 California Air Resources Board. Low Carbon Fuel Standard Quarterly Data Spreadsheet. CARB, accessed 28 February 2023, https://ww2.arb.ca.gov/resources/
documents/low-carbon-fuel-standard-reporting-tool-quarterly-summaries. Q4 2023 values are estimates based on the prior four quarters due to report publication
deadlines.
9 WM. Innovating for Tomorrow: 2023 Sustainability Report. WM, pp 25-26, https://sustainability.wm.com/downloads/WM_2023_SR.pdf
10 WM. WM Unveils New $35 Million Eco Vista Renewable Natural Gas Facility. Waste Management Media Room, 17 July 2023, https://mediaroom.wm.com/wm-
unveilsnew-35-million-dollar-eco-vista-renewable-natural-gas-facility
11 TRC analysis of new vehicle registration data provided by S&P Global Mobility.
12 TRC analysis of new vehicle registration data provided by S&P Global Mobility.
13 TRC analysis of new vehicle registration data provided by S&P Global Mobility.
14 Cummins. Paccar to offer Cummins X15N Natural Gas Engine. Cummins Newsroom, 15 August 2022, https://paccar.com/news/archived-news/2022/paccar-to-
offercummins-x15n-natural-gas-engine/#:~:text=August%2015%2C%202022%2C%20Bellevue%2C,up%20to%20500%20horsepower%20output
15 Daimler Truck Press Room. Freightliner to Offer Cummins X15N Natural Gas Engine. 5 October 2023, https://northamerica.daimlertruck.com/pressdetail/freightliner-to-
offercummins-x15n-natural-2023-10-05/
16 S&P Global Mobility, February 2024 forecast.
17 Walmart Teams Up with Cummins and Chevron to Debut First 15-liter Renewable Natural Gas Engine on the Road in North America. BusinessWire, 18 April 2023, https://
www.businesswire.com/news/home/20230418005380/en/Walmart-Teams-up-With-Cummins-and-Chevron-to-Debut-First-15-liter-Renewable-Natural-Gas-Engine-on-the-
Road-in-North-America
18 Knight Transportation, Cummins, and Clean Energy Demonstrate Potential of Ultra-Low Carbon Fuel Through Cummins X15N Natural Gas Powertrains in California.
Businesswire, 28 September 2023, https://www.businesswire.com/news/home/20230928618128/en/Knight-Transportation-Cummins-and-Clean-Energy-Demonstrate-
Potential-of-Ultra-Low-Carbon-Fuel-Through-Cummins-X15N-Natural-Gas-Powertrains-in-California/
19 Tom Swenson, Director of Global Regulatory Affairs, Cummins Inc., interview with TRC, 3 January 2024.
20 Daimler Trucks North America. Freightliner to Offer Cummins X15N Natural Gas Engine. DTNA Press Room, 5 October 2023, https://daimler-trucksnorthamerica.com/
PressDetail/freightliner-to-offer-cummins-x15n-natural-2023-10-05/
21 Cummins. Paccar to offer Cummins X15N Natural Gas Engine. Cummins Newsroom, 15 August 2022, https://paccar.com/news/archived-news/2022/paccar-to-
offercummins-x15n-natural-gas-engine/#:~:text=August%2015%2C%202022%2C%20Bellevue%2C,up%20to%20500%20horsepower%20output
22 As of February 2024, only Freightliner (of Daimler Trucks North America) and PACCAR (parent company to Kenworth and Peterbilt) had ofcially announced plans to
offer the X15N.
23 For details on manufacturer obligations under the ACT Rule, see the “Federal, State, and Local Policy and Funding” chapter.
24 Holland, Henrik. FAST-TRACKING EV TRUCK CHARGING: PROLOGIS CREATES SOLUTIONS AMID GRID CHALLENGES. Prologis Blog, 30 November 2023, https://www.prologis.
com/blog/fast-tracking-ev-truck-charging-prologis-creates-solutions-amid-grid-challenges
25 Hyliion Holdings Corp. Hyliion Executes a Letter of Intent to Provide KARNO™ Generators to GTL Leasing. Businesswire, 19 December 2023, https://www.businesswire.
com/news/home/20231219776042/en/Hyliion-Executes-a-Letter-of-Intent-to-Provide-KARNO%E2%84%A2-Generators-to-GTL-Leasing
26 TRC analysis.
27 Linear generators are new technology with limited real-world data. This analysis uses equipment specications and emissions factors published by the Environmental
Protection Agency, the Energy Information Administration, Alternative Fuels Data Center, the California Air Resources Board’s EMFAC2021, Argonne National
Laboratories’ GREET Well-to-Wheel Calculator 2022, and manufacturers; the inputs do not represent any one particular product. The following considerations can shift
these results for any given eet: vehicle costs (capital, operating and maintenance); linear generator purchase price; fuel prices; depot space constraints; and carbon
intensity of the locally supplied electricity.
28 Natural Gas Vehicles America estimates based on 10 – 15 percent market penetration of new Class 8 truck sales.
29 Natural Gas Vehicles America. Decarbonize Transportation with Renewable Natural Gas. Natural Gas Vehicles America, April 2023, https://ngvamerica.org/wp-
content/uploads/2023/04/NGV-RNG-Decarbonize-CY-2022-FINAL.pdf
30 California Air Resources Board. LCFS Pathway Certied Carbon Intensities. CARB, arb.ca.gov/resources/documents/lcfs-pathway-certied-carbon-intensities
31 The Coalition for Renewable Natural Gas. Renewable Natural Gas Projects and Policy | RNG Coalition. The Coalition for Renewable Natural Gas, www.rngcoalition.com/
32 Alternative Fuels Data Center. Fuel Prices. AFDC, updated October 2023, afdc.energy.gov/fuels/prices.html
33 Gage, Dan. NGVAmerica Champions Introduce $1.00 RNG Motor Fuel Tax Credit Bill in U.S. House. Natural Gas Vehicles America, 3 April 2023, https://ngvamerica.
org/2023/04/03/ngvamerica-champions-introduce-1-00-rng-motor-fuel-tax-credit-bill-in-u-s-house/
State of Sustainable Fleets 2024 Market Brief 47
TENS OF THOUSANDS LOW-THOUSANDS
Estimated Medium- and Heavy-Duty Vehicles in Operation
TRANSIT SCHOOLDELIVERY UTILITY
CARGO
MUNICIPAL SHUTTLE DRAYAGE
THE FLEET TYPES LEADING BEV ADOPTION
Fleets leading adoption of MD and HD BEV vehicles and approximate vehicles in operation.
REGIONAL
BATTERY-ELECTRIC VEHICLES
Medium-duty deployments skyrocket, diversify geographically
BEV adoption surged in 2023 with deliveries of more than 26,000 buses, trucks, and vans, nearly doubling
2022’s delivery volume. Tractor deliveries grew six-fold, from more than 100 to nearly 700 units, while
volumes doubled in virtually all other sectors.1 Commercially registered cargo vans and pickup trucks
comprised 90% of new on-road BEVs (23,700 units) and Ford and Rivian collectively dominated this
grouping with 50% and 45% of new registrations, respectively. Results of this year’s survey showed that
eets in all the on-road duty cycles covered in this assessment are interested in BEVs: At least 39% of the
eets surveyed in every sector reported using them in 2023, the highest use rate across the ve leading
clean drivetrains for eets. Shuttle eets have the highest early adoption rates among eet types
surveyed (80%), and municipal and urban/last mile eets were the next highest eet types represented
among user groups (63% and 60% of eets in these categories reporting use, respectively).
State of Sustainable Fleets 2024 Market Brief 48
Research suggests that demand is growing
outside of California, and regulations are a
strong motivator. One report nds that Texas and
Florida were the rst and third largest markets
for electric cargo vans, larger than California,
for zero-emission trucks (ZETs) deployed through
June 2023.2 The same report nds that 40% of
ZEVs, mostly cargo vans, were in states that have
adopted California’s ACT rule and less than
one-fth of the operating ZETs are registered
in California.3 However, California’s ACF rule is
expected to drive up MD and HD ZEV purchases
in the state starting this year, as eets operating
box trucks, vans, and two-axle buses prepare to
meet major milestones from January 1, 2025 and
onward.
Market fundamentals in funding, regulation
and product options are also shaping up to
support the adoption of battery-electric school
buses. Blue Bird and Accelera, a Cummins
brand, partnered to develop the former’s next-
generation model.4 Not long after, Blue Bird
made an industry milestone and delivered its
1,500th battery-electric bus.5 State and federal
programs moved resources to support school
eets looking to buy, with New York committing
$100 million for battery-electric purchases in
2023/2024, and Michigan approving similar
funding in its annual budget.6,7 The EPA Clean
School Bus Awards recovered from a setback
in the previous year, when 51 awards made
to approximately 12% of applicants had to be
returned due to recipients’ lack of readiness.8
Program revisions and strong demand in 2023
enabled EPA to issue two tranches of funding
and distribute almost $1.5 billion to 280 school
districts for nearly 3,000 buses, 98% of which
are electric. Awards prioritized high-need/low-
income, rural, and tribal applicants.
School bus eets are almost entirely dependent
on incentives to electrify. Even with benets
BEV adoption nearly
doubled in 2023, with more
than 26,000 buses, trucks,
and vans delivered. Cargo
vans and pickup trucks comprised
90% of new deliveries.
“Purchasing and utilizing EVs
has greatly surpassed our
expectations as it relates to
speed, performance, charging,
and maintenance costs. The
vehicles are fun to drive, and
our user departments are
satised.”
– Cathy Crum, Contract Manager,
City of Tallahassee, Florida
State of Sustainable Fleets 2024 Market Brief 49
like those above, a new electric bus remains
approximately $150,000 more expensive than a
new diesel model before taxes, fees, and related
charging infrastructure costs.9 Short-term cost
effectiveness is a priority for most school district
eets, and Blue Bird notes that this may keep
demand on a moderate growth curve until the
economics become more favorable.10 That
may not matter in states with new school bus ZE
mandates. A new California rule enacted in 2023
requires public school bus eets to meet a 100%
ZE operating standard by 2035.11 New York also
passed a statewide mandate for school buses
to electrify, and Connecticut, Maryland, and
Maine have all passed laws requiring electric
buses for certain types of bus purchases or
in priority neighborhoods, some of these with
funding attached.12 BEV demand from these
states is expected to grow signicantly during
the next 10 years.
Adoption growing in delivery,
short haul, transit, paratransit,
as large eets plan for scale
Large eets running shorter, local, and/or
lightweight routes have identied, and in some
cases even smoothed, critical obstacles to
commercial BEV adoption. Many of these early
adopters are now pursuing their second or third
purchase orders. Survey results indicate that 90%
of eets currently using BEVs expect their use to
increase during the next two years, and 61% of
these users own at least 50 vehicles, with many
of these eets having hundreds or thousands
of vehicles in their operations. An independent
study identied eets with more than 1,000
vehicles running van and yard truck operations
as the market leaders in 2023.13 However, most
users in the annual survey report that BEVs
account for only 1-2% of all their vehicles today.
Several notable eet commitments in 2023
illustrate a growth trajectory. National logistics
provider Cintas expanded its electric van eet
from seven to 37 Motiv eVans in May after
piloting BEVs in 2022, while national apparel
distributor UniFirst committed to buy 200 electric
vans from Xos and took delivery of the rst 30 in
2023.14,15 The USPS announced its intent to buy
66,000 electric vehicles from multiple providers
through 2028.16 Adoption may also be predicted
by corporate sustainability commitments.
PepsiCo has set ambitious climate targets, and
this year, its brand Frito-Lay took delivery of
more than 700 electric vans, while Pepsi began
testing Tesla’s Semi in long-haul beverage
distribution.17,18 These pilots and phased
purchases demonstrate that eets are beginning
to scale some BEV operations, especially in MD
and local delivery.
Large volume deployments across sectors
and in individual eets were a priority for
funding agencies in 2023. In June, the Federal
Transit Administration (FTA) awarded nearly
$1.7 billion to 130 transit projects in 46 states
and territories, facilitating the deployment of
approximately 800 zero-emission buses (ZEBs).
Many awardees agreed not to customize their
orders to avoid cost overruns and production
delays, demonstrating stakeholders’ awareness
that such a large push in orders requires
careful coordination within and among the
manufacturers, infrastructure providers, and
Research shows signicant growth
in EV markets outside California,
with Texas and Florida
emerging as major players
for electric cargo vans,
surpassing California in new
deployments.
State of Sustainable Fleets 2024 Market Brief 50
eets.19 In California, state-funded project JETSI
began capturing data on two eets deploying
50 Class 8 tractors each (total of 100 units), and
a local agency awarded funds to urban and
short-haul eets that are trying to expand their
vehicle and charging station networks rapidly to
meet growing demand.
Growth may not be easy for small eets
and eets serving long-haul routes, despite
many facing ZEV mandates. The majority
of U.S. truck eets (95.8%) operate 10 or
fewer vehicles, or roughly 35% of trucks on
the road. This demographic often grapples
with nancial constraints such as insufcient
grant funding, high tax burdens, and limited
access to nancing options.20,21 Drayage
eets at the Ports of L.A. and Long Beach, the
nation’s largest ports, are a microcosm of how
transition pressures can exacerbate economic
differences. Many stakeholders raise concerns
that small, locally owned drayage businesses
may collapse, leave, or sell to a select few large
corporate eets if they are unable to access
BEVs and charging services affordably in the
next several years.22 For long-haul eets, battery-
electric technology remains infeasible for most
routes, and emerging state regulations and
incentives are creating a patchwork landscape
for key freight corridors, making synchronized
corridor charging infrastructure planning efforts
difcult.
Vehicle availability and suitability improved in
2023. Although several start-ups went bankrupt
or pivoted and acquisitions eliminated some
models, incumbent OEMs introduced new
models, with the end result that the number of
available BEV models held steady between 2022
and 2023. RIZON, backed by Daimler, brought
several of the rst Class 4 and 5 vehicles to the
MD urban delivery sector.23 Rivian’s Amazon-
originated van became widely available
when the companies ended their exclusivity
agreement and AT&T became Rivian’s second
large customer.24,25 Mack began taking orders for
its new MD electric truck, and Isuzu announced
plans to re-introduce an electric version of its
popular Class 5 NRR.26,27 New Flyer advertised an
impressive 33% range improvement on its 60-ft
articulated transit bus model.28 Terraline began
testing its 500-mile Class 8 BEV with global supply
Nearly $1.5 billion in EPA
funding was distributed to
electrify 3,000 school buses in
2023 alone.
State of Sustainable Fleets 2024 Market Brief 51
chain eet Crowley, and NACFE’s Run-on-Less
project published data showing that Tesla’s Semi
achieved 300 miles on a single charge, logging
nearly 650 miles per day.29,30
Looking forward, S&P Global Mobility forecasts
that BEVs will account for 19.4% of Class 4-7
U.S. truck sales by 2030, with about 53,000
units sold per year to support a range of MD
operations. Overall, Class 8 and particularly
long-haul applications will be more difcult for
battery-electric technology. Adoption is being
driven by new product quantity and quality,
compliance pressure, and improving total costs
of ownership.31 S&P Global Mobility predicts
that the prices of these vehicles, on average,
will drop 30% by 2030, driven by declining
battery costs, manufacturing improvements,
new technologies, and economies of scale, but
observes that there are several distinct factors
that could accelerate or reverse these trends,
which all have high degrees of uncertainty. The
cost of production and nal products, as well
as limited charging infrastructure, are persistent
obstacles, but S&P Global Mobility suggests that
the proliferation of ZEV-favorable regulations
and the growing number of investments in the
domestic battery industry can help overcome
these, while the debut of new makes and
models signals stakeholder condence.
Large eets like PepsiCo
and the USPS are rapidly
expanding their electric
vehicle eets, with commitments
for tens of thousands of electric
vehicles in the case of the U.S.
Postal Service.
Partnerships, efciency with
utilities becomes the top
variable for eets
Charging infrastructure gaps and delays
dominated discussions in 2023. Reliable access
to sufcient power is crucial to the success of
any private or public charging facility, and
electrical service has become the make-or-
break element of the rst depot-sized projects.
This year, Amazon said power sufciency was
a dening criterion for EV site selection and a
key to its success energizing more than 12,000
chargers for its electric van eet as part of its
plan to operate 100,000 BEVs globally by 2030
that was reported in previous years.32 Maersk
credits a similar planning strategy organized
around using existing power supplies and
avoiding utility upgrades for its ability to electrify
its rst depot within 12 months.33
In an independent survey conducted by TRC
Companies in Fall 2023, early adopters who had
or were in the process of electrifying their depots
reported low levels of satisfaction with the utility
services received after the initial design stage,
citing long delays, opaque communication, and
changing points of contact.34 While most eets
trust their utility’s site assessment, the utility’s long
timelines can upend a eet’s purchasing and
deployment schedule, putting large investments
at risk.
“The cost of infrastructure and
time to develop it can be
greater than expected. We are
building longer planning and
development times into our
electrication plans.”
– Jenaro Ibarra, Logistics Manager,
Lineage Logistics, Michigan
State of Sustainable Fleets 2024 Market Brief 52
Many delays can be explained by a lack of
data to plan and prepare for electrication
on the part of both eets and utilities. Utilities
— as regulated monopolies with a mandate
to provide reliable electric service and make
prudent investments — need locational data
about expected eet load growth to support
their investment plans. Fleets need utility data on
existing power supply, infrastructure capacities,
and upgrade costs and schedules to support
their planning. This data can be difcult to
access and may lack necessary detail; it can
also vary across the highly disaggregated utility
industry that includes more than 3,000 utilities,
municipalities, and electric power cooperatives
in the U.S.35
As the sector struggles with data sufciency
spreads to eets, policymakers and industry
groups have begun introducing corrective
measures and planning for the future. This
year, California’s SB410 ruling requested that
the state’s Public Utility Commission (PUC)
dene appropriate timelines to complete work
requests to energize facilities, which many
stakeholders expect to result in a 90- to 120-day
window; the decision is expected in 2024 or
2025.36 Meanwhile, public agencies in the state
are working with industry leaders to map and
measure near-term demand from transportation
eets to support utilities as they plan and submit
load forecasts and associated rate cases to
the PUC for approval. Cross-industry coalitions
and partnerships are working to bridge the gap.
EPRI’s EV2Scale initiative brings together vehicle
OEMs, eet operators, and utilities to collaborate
and plan for scale. A key initiative underway
is the development of an EVRoadmap that
provides eet locational data to utilities and
utility capacity data to eets, easing planning
on both sides.37 These efforts aim to help
the industry use shared data to make more
informed decisions faster to meet the pace of
electrication that both the transportation and
utility sectors are trying to achieve.
Edison Electric Institute points out that the utility
business model has always supported single- and
low double-digit megawatt-level upgrades, but
that has only been necessary for slower moving,
multi-year infrastructure projects — until now.
Fleet deployment timelines are much shorter
than new stadium construction timelines, which
typically require as much power as a mid-size HD
eet electrication project.
State of Sustainable Fleets 2024 Market Brief 53
The scale of upgrades being pursued in larger
eet electrication projects constitute sizeable
capital projects which may require longer lead
times for siting, permitting, and interconnection
(Table 2). Exelon suggests that utilities could
consider offering make-ready programs to
support large, public-facing charging facilities.
The timelines for such projects may better
align with utilities’ existing procedures and
obligations while serving multiple customers
simultaneously, achieving greater economies of
scale than private, single-customer facilities.38
Finally, similar to other sectors, supply chain
shortages that began with COVID continue to
hamper infrastructure timelines. Transformers are
particularly problematic as necessary features
of a utility upgrade that still had lead times of
up to two years in 2023. Labor shortages are not
new but have become more acute as demand
for electrical service grows through the U.S.
economy’s energy transition.
Large charging depots, onsite
generation, and emerging
corridors aim to address
charging challenges
In July, charging station developer WattEV
opened the rst publicly accessible HD truck
charging depot at the Port of Long Beach,
making 26 charging ports available to drayage
eets.39 Various operators took rst steps
elsewhere: TruckNet opened a public-charging
facility capable of supporting HD trucks moving
freight near and across California’s Mexican
border, and industrial wind power developer
One Energy energized a hub in Findlay, Ohio,
that is designed to charge 90 trucks at 300 kW
simultaneously.40,41
Start-ups and seasoned stakeholders are using
a mix of grant funds, corporate investments
and venture capital to secure land, capture
anchor tenants and deploy charging — as well
as hydrogen fueling — assets. Prioritizing sites
with existing electrical service and short upgrade
timelines can help control project schedules, but
NATIONAL GRID AND HITACHI ENERGY STUDY ESTIMATES*SCE ESTIMATED TIMELINES**
Lead Times Upgrades Timelines Upgrades
1-4 years Distribution level capacity needs Any Size Project:
No lesser than 2 years
18 months+ for simple
upgrades
(e.g. upgrade to existing
circuits)
4-8 years Substation and transmission level
capacity needs
3-10 MW Project:
No lesser than 3 years
3+ years for moderate
upgrades
(e.g. new circuits)
Only 25% of feeders in the study can accommodate 30-40
electric trucks charging at once. Planning and construction
must start sooner for lines with less available capacity.
10-15 MW Project:
No lesser than 5 years
6+ years for major
upgrades
(e.g. new substations)
Table 2: Typical power requirement timelines vary by project and location. Some projects require sizable upgrades that add time.
* Source: https://www.nationalgrid.com/document/150356/download
**Timing depends on the capacity & complexity of the localized distributor grid. The times above are guidance only and may be substantially longer if project with
licensing requirements are triggered. More detail at: https://www.act-news.com/webinar/readying-southern-california-edisons-grid-for-our-ev-future/
State of Sustainable Fleets 2024 Market Brief 54
conditions vary by state, jurisdiction, and even
land plot. EV charging infrastructure developer
Voltera noted that while California’s regulations
provide some guarantee of a customer base,
the competition for electricity is exceptionally
high. Voltera is building a geographically diverse
portfolio to manage long energization timelines,
as well as high real estate acquisition and
development costs.42
With utility timelines for high-power charging
facilities stretching from three to seven years,
eets are nding workarounds. At the beginning
of the year, start-up Terrawatt deployed several
temporary 450 kW chargers at its rst facility, in
Commerce, California, to support eets while it
awaits utility service and construction in 2025.43
New linear generator technology is a promising
bridge solution that leverages widely available
gaseous energy sources to power BEV chargers
for mobile and remote needs, as discussed in the
Natural Gas and Propane chapters.
Two publicly funded studies in California and
along the East Coast aim to pinpoint locations of
greatest need for the commercial truck industry.
In California, a state-sponsored assessment
identied six priority corridors for hydrogen
fueling and BEV charging station development
and proposed several actions to advance this
work in a timely fashion.44 Exelon and NREL are
studying a 900-mile section of I-95 between
New Jersey and Georgia to identify electriable
locations for public-access charging at 30-mile
increments.45 The project will propose a corridor
plan and incorporate recommendations about
relevant community needs and priorities. Both
studies will also be available to educate private
developers, vendors, and eets, informing their
engagement with policymakers and funding
agencies.
Start-ups and seasoned
stakeholders are using
a mix of grant funds,
corporate investments,
and venture capital to
secure land, capture anchor
tenants, and deploy charging.
“Scaling heavy-duty
battery-electric charging
infrastructure is challenging
due to utility timelines,
supply chain complexities,
and the large quantity of
electricity needed to fuel
Class 8 battery-electric
trucks. Working with our
partner, Prologis, we
developed a solution
for charging using linear
generators and energy
storage, allowing Maersk
to generate up to 10 MW of
electricity onsite within a
short timeline.”
– Carlo Bertani, Maersk – Energy
Procurement & Development,
Americas
State of Sustainable Fleets 2024 Market Brief 55
SIDEBAR: WILL PUBLIC AND MEGAWATT CHARGING
MAKE A DENT?
Most current BEV users in the annual survey (58%) expressed that their decision to use or purchase more
BEVs in the next two to ve years is somewhat or very dependent on cost-effective public charging
access. Most eets that depend on existing public chargers are smaller vehicle users, such as Class 2-3,
which can frequently be accommodated at passenger car–accessible stations and are well suited to
lower power charging.
High-powered charging (500 kW, 1MW or more) is not a requirement for most eets today. Fewer than
a third (29%) of surveyed eets that used BEVs in 2023 consider it necessary for their growth plan. Only a
handful of manufacturers offer charging equipment rated over 500 kW while the Megawatt Charging
Standard (MCS) goes through certication, but many experts see high-powered charging as essential
to widespread BEV adoption. While some applications may require high-powered charging to t BEVs
into the diesel operating schedule, most early adopters are growing their BEV use in best-t applications
where charging rates below 500 kW are suitable or even preferable for avoiding battery degradation
and high electricity costs.
Fits and starts, including
consistently high input costs,
delay HDV production
HD truck manufacturers struggled to ramp
up their production lines in 2023 and are
unlikely to break through existing barriers in
2024. Persistently high production costs were
exacerbated by labor shortages and the burden
of new compliance obligations, which continue
to unfold in 2024. Although ZEV production
continues to promise jobs, the variety and reach
of credible training resources today is limited,
and growth relies on a mix of manufacturer
initiatives and public-private partnerships
with technical and community colleges.46
Stakeholders have also commented that
State of Sustainable Fleets 2024 Market Brief 56
navigating sales obligations under California’s
ACT and Low NOx Omnibus rules, as well as
those in ACT-adopting states, has introduced
a unique staff burden.47 Many manufacturers
have engaged external advisors, redirecting
resources from the go-to-market effort. A few
high-prole recalls associated with battery res
and other malfunctions highlighted the cost of
new technology. Although not uncommon for
new products, price tags on BEV recalls reached
the billions, putting a severe burden on some
manufacturers’ abilities to reduce customer
prices.48
The frustrated roll-out of California’s ACF rule in
early 2024 further complicated sales projections.
Although the rule aims to create the demand
manufacturers need to allocate build slots,
virtually all HD BEV purchases today are made
with subsidies that are difcult to access within
the typical purchase schedule. For example,
a eet using a voucher from California’s HVIP
program must present contracts with its utility
and charger provider to complete its order,
but many eets cannot commit to a charger
purchase unless their application for a voucher
is approved.49 Holding completed vehicles on
the lot while a eet awaits utility upgrades or
charger installation, for example, is prohibitively
expensive for dealers and vendors. Such
conditions forced Velocity Vehicle Group
(VVG) to cancel many Class 8 BEV orders in
2023.50 In addition to being complicated, some
incentives are simply insufcient: Millions made
available for ZE drayage trucks by the L.A. and
Long Beach Ports went largely untouched in
an initial offering due to rising truck costs and
a lack of charging solutions. These funds were
redirected in November and are now available
to supplement HVIP vouchers for ZE drayage
trucks, including awards made since 2021 but
not yet redeemed.51
These market dynamics have prompted
manufacturers to make conservative ZEV sales
forecasts, necessarily reducing the number of
State and federal
regulations and funding
are driving signicant
investments in BEV
adoption, with complex
incentive structures inuencing
eet decisions.
State of Sustainable Fleets 2024 Market Brief 57
and coordinating with utilities and funding
agencies. Business models vary and remain
uid as companies emerge from fundraising
and begin implementing services, but active
players today generally fall under one of the four
categories described in Table 3.
Aligning core factors of power availability,
power price, local regulations, incentives, and
customer needs is a big challenge for these
new entrants. Competition is highest in areas
where eets are required to electrify.57 By
comparison, markets that use incentives more
than regulations may have more suitable land,
but the customer base is harder to predict.
Voltera points to these tradeoffs as one reason it
is diversifying its product portfolio across several
regions.58 Cultivating a reputation for leadership
Leasing models proliferate but
details are vague in market’s
early days
Turnkey “as a service” models proliferated from
a variety of companies aiming to accelerate
eets’ BEV adoption by lowering the upfront
barriers of cost and access. Services range from
on-demand charger access to equipping drivers
with trucks, dedicated charging stations, and
vehicle maintenance for a bundled fee. Some
businesses are focused on building facilities at
various locations and others are contracting with
eets to build dedicated facilities on or adjacent
to customer depots. Nearly all providers purport
to remove the hassle of identifying contractors,
overseeing development and implementation,
assets of Proterra, a former leader in battery
electric transit buses that declared bankruptcy
last year.53 Accelera, Daimler, and PACCAR
jointly invested in a 21 GWh U.S.-based battery
cell production factory initially dedicated to
the eet market with EVE Energy, and the DOE’s
Critical Materials Collaborative released $3.5
billion for battery manufacturing projects.54,55
These investments add to numerous new
factories and partnerships announced since the
IRA and the CHIPS and Science Act were passed
in 2022.
Evolving labor standards impacted cost and
production targets in 2023 and are expected
to play a larger role in industry activity going
forward. While the high-prole United Auto
Workers (UAW) strike in summer 2023 primarily
impacted light- and medium-duty vehicle
manufacturers Ford, GM, and Stellantis, it
illustrated that the real cost of fair-wage, Buy
America-compliant equipment will likely exceed
some forecasts.56
internal combustion engine vehicles that they
sell in California based on the allowed ratio of
ZE-to-ICE vehicles they can sell in a given year.
Although manufacturers can opt to sell more
ICE vehicles today for a higher ZEV commitment
in the future, few appear ready to take this
path. Beyond state regulations, the federal
Buy America policy is expected to constrain
near-term price drops. Under this policy, BEVs
and charging infrastructure must contain a
certain percent of materials and labor either
from the U.S. or designated “friendly” countries.
Compliance can be difcult to prove, and
manufacturers have had to introduce new
supply chain monitoring tools and practices,
particularly for their batteries. Outside of China,
global commercial vehicle battery prices only
dropped 14% between 2022 and 2023, to $139/
kWh (cell + pack), and they are expected to fall
a mere 6% in 2024.52
Several public and private ventures introduced
in 2023 aim to help the industry improve. Volvo
acquired the battery-making and charging
State of Sustainable Fleets 2024 Market Brief 58
SERVICE TERM APPROXIMATE DEFINITION OFTEN USED FOR:
Charging Networks Chargers installed at multiple public
locations under one brand
Fleets whose drivers fuel on-route or off-duty;
public-access facilities
Charging as a Service Charging infrastructure installed on customer
sites; option for turnkey management
services
Fleets requiring private charging solutions and
may or may not manage charging in-house
Fleet as a Service Vehicles and charging infrastructure are
maintenance services
Fleets who want to avoid capital costs and/
or ownership and use routes that include
vendors’ sites
Charging Infrastructure as a Service Charging facilities are developed for
customers’ needs but operations are
managed by provider
Fleets who require dedicated charging
depots but don’t want to invest in new facility
acquisition and development
Table 3: Approximate categories of third-party charging services in 2023.
rather than meeting a compliance minimum
can be better for business, representatives point
out, and eets’ interest in sustainability leadership
may inform their decisions in less-regulated states
and jurisdictions during the next several years.
Initial costs are high for these “as a service”
providers, often exceeding what many providers
have fundraised, and few companies have
the credit required for large loans.59 Given the
understandably long lead times on facilities
and services in a rapidly changing market, it
is impossible to predict how effective these
services will be at helping eets decide to
electrify sooner than they would without these
options. Initial lease package pricing estimates
point to a monthly total cost of ownership that is
several thousand dollars higher than the diesel
equivalent today.60 What can be reasonably
assumed is that these models will not meet
the needs of small eets, the largest and most
vulnerable segment of the MD and HD trucking
industry. Dening the pathway for small eet
electrication remains a top challenge.
Meanwhile, established leasing agencies are
already well positioned to lead on BEV options.
Penske added hundreds of electric vans to its
eet on both coasts in 2022 and 2023, the rst
tranche of a very large order announced in
recent years.61 Dealership VVG purchased 200
Class 8 trucks to lease in California, and Mack
Trucks introduced a leasing program to help
customers begin using its MD BEV.62,63 Looking
ahead, the ability of businesses to navigate long
equipment and utility lead times and deliver
services that reliably help eets meet regulation
and business objectives will determine how
much BEV ownership and operations deviate
from the diesel standard.
By 2030, BEVs are
expected to make up
19.4% of Class 4-7 U.S.
truck sales, according to
S&P Global Mobility.
State of Sustainable Fleets 2024 Market Brief 59
Exelon’s experience as a utility
transitioning its own eet offers
lessons, perspective
Exelon, the nation’s largest energy transmission
and delivery company by count of customers
served by its six transmission and distribution
utilities, is leveraging its own eet transition
experience to help its more than 10 million
customers electrify their vehicles. In 2020, Exelon
set a goal to transition 50% of its eet to electric,
plug-in hybrid, or idle emissions mitigation
systems by 2030, and in 2023 had electried 17%
of its eet.64 This work has informed several web-
hosted roadmaps for its member utilities and
their customers, attending to the unique needs
and opportunities in each jurisdiction.
In an interview for this report, Exelon staff
identied several factors that have been
essential to their projects’ success:
• Set ambitious, achievable targets within a
clear timeframe that are aligned with
company and operational nancial
parameters;
• Establish guiding principles for executing the
work with an eye towards scale;
• Introduce new processes and technologies in
pilots with iterative stages; and
• Conduct periodic reviews to incorporate
feedback, adapt to changing market
conditions, optimize design and
implementation, and identify lessons learned.
Exelon reports that pursuing vehicle
electrication gave it a better insight into the
customer experience. Improving the quality and
quantity of data on load, vehicle performance,
and long-term eet needs would accelerate
utilities’ pace of work and ease the transition,
Exelon says. While utilities widely encourage
their customers to engage early and often on
their eet transition plans, each conversation
is unique, and synthesizing information can
be complex. Exelon adds that policy and
regulations that govern electricity rates, sales,
and data sharing differ across states, adding
complexity for both utilities and eets. Strong
data standards development underway in
various forums in which Exelon participates
should inform the collaborative development
of whole-system strategies by utilities,
manufacturers, and end-user eets.
Improving the quality
and quantity of data on
load, vehicle performance, and
long-term eet needs would
accelerate utilities’ pace of work,
Exelon says.
State of Sustainable Fleets 2024 Market Brief 60
INDUSTRY PERSPECTIVE: EDISON ELECTRIC INSTITUTE (EEI)
Fleet electrication is a growing priority for
policymakers and for commercial and public
eet operators, and it represents an important
step toward meeting sustainability goals. Today,
more than 40% of the nation’s electricity comes
from clean, carbon-free sources like nuclear,
hydropower, wind, and solar energy. Electric
power sector carbon emissions have been
declining for the last decade and are now
nearly 17% below transportation sector emissions.
The industry is supporting the electrication of
the transportation sector and the increased
adoption of EVs, which will help reduce emissions
from the transportation sector and provide
environmental, health, and cost benets to
customers and local communities.
Electric companies are well-positioned to
support corporate and public eet customers.
EEI member companies are investing more than
$5.2 billion in customer programs to support
charging infrastructure and other actions to
accelerate electric transportation. A signicant
portion of this investment is available for advisory
services and charging needs for commercial
and public eets. These programs typically
help to reduce the customer cost of installing
charging infrastructure by providing rebates,
“make-ready” infrastructure for customers,
and/or end-to-end charging solutions. Fleet
customers can nd more information on these
programs in EEI’s EV Program Database, which
catalogues more than 500 offerings from EEI
member companies.
On the policy front, federal legislation is
providing an unprecedented boost to
transportation electrication. The Infrastructure
Investments and Jobs Act makes more than
$20 billion of federal funding available for
electric transit buses, electric school buses,
public EV charging infrastructure, and more
during the next several years. This investment
already is having an impact with more than 20
states announcing awards for the rst round
of charging stations funded by the $5 billion
National Electric Vehicle Infrastructure program.
The EPA has also awarded nearly $2 billion in
grants and rebates to school districts for new,
clean buses.
The Ination Reduction Act provides individuals
and businesses with tax credits for new, used,
and commercial EVs, as well as charging
infrastructure, and $7 billion in funding for
medium- and heavy-duty vehicle electrication,
port electrication, and electrication of the
USPS eet. In addition, several EEI member
companies are participating in Zero Emission
Freight Corridor Studies funded by the DOE,
making electrication an increasingly attractive
path for truck manufacturers and eet operators.
EEI and its member companies are collaborating
with technology partners to identify and address
the proactive grid investments needed to further
enable transportation electrication. Studies
like the recently released Electrifying Airport
Ecosystems from Enterprise Mobility and Xcel
Energy highlight the growing electrication
demands nationwide and the infrastructure
investments needed to meet them. Exelon and a
partner have analyzed school bus electrication
benets and grid impact in their whitepaper
on the Electric School Bus Transition. EPRI, with
State of Sustainable Fleets 2024 Market Brief 61
support from automotive partners and electric
companies, recently launched EVs2Scale
2030, a landmark initiative to address major
barriers to achieving widespread transportation
electrication.
In short, electric companies are preparing for
the coming wave of eet electrication. While
hurdles like supply chain constraints for vehicle
components and electrical equipment remain,
these challenges only heighten the need for
early collaboration between eet customers
and their electric company partners to ensure a
seamless transition.
All opinions in the above Industry Perspective represent the opinion of the aforementioned organization and do not
reect the opinions of TRC Companies, Inc. (TRC) or the report sponsors.
1 TRC analysis of new vehicle registration data provided by S&P Global Mobility.
2 The vast majority of zero-emission trucks are battery electric today due to the early commercial status of hydrogen fuel cell trucks; see the Hydrogen chapter for more.
This study assessed cargo vans, step vans, trucks, refuse and yard trucks.
3 CALSTART. Zeroing in on Zero-Emission Trucks: The State of the U.S. Market. January 2024, p. ix, p. 11. Vehicle data is based on state registration records and vehicles may
be operated outside of the state in which they’re registered.
4 Mills, John. Accelera and Blue Bird unveil next-generation electric school bus. Accelera, 26 July 2023, https://www.accelerazero.com/news/accelera-and-blue-
birdunveil-next-generation-electric-school-bus
5 Blue Bird Staff. Blue Bird Delivers its 1500th Electric School Bus. Blue Bird, 24 October 2023, https://www.blue-bird.com/about-us/press-releases/265-blue-bird-delivers-its-
1500th-electric-school-bus
6 School Bus Fleet Staff. New York Makes $100M Available for Zero-Emission School Buses. School Bus Fleet, 29 September 2023, https://www.schoolbuseet.
com/10207190/new-york-makes-100m-available-for-zero-emission-school-buses
7 Nemes, Judith. Michigan Passes Historic Funding for School Bus Electrication. Environmental Law & Policy Center, 29 June 2023, https://elpc.org/news/michigan-
passeshistoric-funding-for-school-bus-electrication/
8 Environmental Protection Agency. Clean School Bus Program Awards. EPA, https://www.epa.gov/cleanschoolbus/clean-school-bus-program-awards
9 TRC analysis of vehicle price data supplied by manufacturers and leading incentive programs.
10 Albert Burleigh, Vice President of Alternative Fuels, Blue Bird Corporation, interview with TRC, 21 December 2023.
11 California State Legislature. California AB579: 2023-2024: Regular Session. LegiScan, 8 October 2023, https://legiscan.com/CA/text/AB579/2023
12 McLaughlin, Katrina and Sedigh, Navva. Electric School Buses Win Big in US State Legislative Sessions. World Resource Institute, 29 July 2022, https://www.wri.org/insights/
electric-school-buses-us-legislative-victories
13 Heavy Duty Trucking Staff. HDT Fact Book 2023: Sustainability and the Decarbonization of Trucking. HDT News, 30 October 2023, https://www.truckinginfo.
com/10209157/hdt-fact-book-2023-sustainability-and-the-decarbonization-of-trucking
14 Motiv Power Systems. Cintas orders 30 additional electric delivery vans from Motiv Power Systems. Green Car Congress, 3 May 2023, https://www.greencarcongress.
com/2023/05/20230503-motiv.html
15 Xos, Inc. Xos Secures 30-Truck Purchase Order From Repeat Customer UniFirst. Global Newswire, 1 August 2023, https://www.globenewswire.com/newsrelease/
2023/08/01/2715978/0/en/Xos-Secures-30-Truck-Purchase-Order-From-Repeat-Customer-UniFirst.html
16 Shepardson, David. U.S. Postal Service next-generation delivery vehicles delayed to mid-2024. Reuters, 1 May 2023, https://www.reuters.com/world/us/us-postal-
servicenext-generation-delivery-vehicles-delayed-mid-2024-2023-05-02/
17 Frito-Lay North America. Frito-Lay Expedites 2040 Net-Zero Emissions Goal with Over 700 Electric Delivery Vehicles. PR Newswire, 20 April 2023, https://www.prnewswire.
com/news-releases/frito-lay-expedites-2040-net-zero-emissions-goal-with-over-700-electric-delivery-vehicles-301802983.html
18 Mahoney, Noi. PepsiCo praises Tesla Semi’s performance on long-haul, regional loads. FreightWaves, 10 August 2023, https://www.freightwaves.com/news/
pepsicopraises-tesla-semis-performance-on-long-haul-regional-loads
19 Federal Transit Administration. Biden-Harris Administration Announces Nearly $1.7 Billion to Help Put Better, Cleaner Buses on the Roads in Communities Across the
Country. FTA, 26 June 2023, https://www.transit.dot.gov/about/news/biden-harris-administration-announces-nearly-17-billion-help-put-better-cleaner-buses
20 American Trucking Association. Trucks move roughly 72.6% of the nation’s freight by weight. That is just one of many statistics calculated and tracked by American
Trucking Associations’ professional staff that you can learn about here. ATA, https://www.trucking.org/economics-and-industry-data
21 Cheeseman, Jennifer and Andrew Hait. America Keeps on Truckin’. United States Census Bureau, 6 June 2023, https://www.census.gov/library/stories/2019/06/
americakeeps-on-trucking.html
22 Sustainable Supply Chain Advisory Committee. January 2024 Meeting Summary. 25 April 2024. Accessible at https://ssclalb.org/committee-meeting-summaries/
23 Daimler Trucks North America. Daimler Truck launches RIZON medium-duty electric trucks in the United States. DTNA Newsroom, 28 April 2023, https://www.
daimlertruck.com/en/newsroom/pressrelease/daimler-truck-launches-rizon-medium-duty-electric-trucks-in-the-united-states-52213957
24 Associated Press Staff. Rivian to end exclusivity with Amazon, allow other companies to buy its electric vans. Associated Press, 7 November 2023, https://apnews.com/
article/rivian-ev-amazon-delivery-f9168099d0f911b479845722d5e22b2d
25 Miller, Jay. AT&T Agrees to Purchase Rivian Electric Vehicles Through Pilot Program. NGT News, 14 December 2023, https://ngtnews.com/att-agrees-to-purchase-
rivianelectric-vehicles-through-pilot-program
26 Mack Trucks. Medium-Duty Mack® MD Electric Now Available for Order. Mack News, 28 June 2023, https://www.macktrucks.com/mack-news/2023/medium-duty-
mackmd-electric-now-available-for-order
State of Sustainable Fleets 2024 Market Brief 62
27 Lovrak, Tess. ChargePoint to provide EV charging infrastructure, training for Isuzu electric trucks. Fleet Equipment Magazine, 9 October 2023, https://www.
eetequipmentmag.com/isuzu-selects-chargepoint-ev-charging-infrastructure-training/
28 Metro Magazine Staff. New Flyer Announces Increased Range on 60-Foot Electric Artics. Metro Magazine, 9 October 2023, https://www.metro-magazine.
com/10207866/new-yer-announces-increased-range-on-60-foot-electric-artics
29 Crowley. Terraline to Test Electric Class 8 Truck with Florida Fleet. HDT Trucking Info, 7 November 2023, https://www.truckinginfo.com/10209768/terraline-to-test-
electricclass-8-truck-with-crowley-eet
30 Run on Less. Data For Tesla 1. Geotab. https://results-2023.runonless.com/truck/?day=18&depot=pepsico&truck=pepsi_tesla1&units=imperial
31 S&P Global Mobility February 2024 forecast
32 Ferris, David. Inside Amazon’s EV charging challenge. EnergyWire, 10 January 2024, https://subscriber.politicopro.com/article/eenews/2024/01/10/inside-amazons-
evcharging-challenge-00134581
33 Maersk. Maersk North America shares best practices to help customers prepare for electric vehicle future. Maersk News, 27 January 2023, https://www.maersk.com/
news/articles/2023/01/27/maersk-na-shares-best-practices-to-help-customers-prepare-for-electric-vehicle-future
34 TRC. Survey of Fleet Satisfaction with EV Service Providers, September – November 2023.
35 Edison Electric Institute, interview with TRC, 15 December 2023, and, Exelon Corporation, interview with TRC, 11 January 2024.
36 Edison Electric Institute, interview with TRC, 15 December 2023.
37 Electric Power Research Institute. EPRI’s EVs2Scale2030™. Accessed 12 April 2024, msites.epri.com/evs2scale2030
38 Exelon Corporation, interview with TRC, 11 January 2024.
39 WattEV. Port of Long Beach. 24 July 2023, https://www.wattev.com/port-of-long-beach
40 San Diego Gas & Electric. CA’s First Public, DC Fast Chargers For Electric Medium and Heavy-Duty Vehicles at a Truck Stop Open for Public Use. SDGE News, 27
March2023, https://www.sdgenews.com/article/cas-rst-public-dc-fast-chargers-electric-medium-and-heavy-duty-vehicles-truck-stop-open
41 One Energy. One Energy Energizes the Largest Electric Semi-Truck Charging Site in US at 30 MW Megawatt Hub Site in Ohio. BusinessWire, 9 October 2023, https://
www.businesswire.com/news/home/20231009589668/en/One-Energy-Energizes-the-Largest-Electric-Semi-Truck-Charging-Site-in-US-at-30-MW-Megawatt-Hub-Site-in-
Ohio/
42 Virginia Hewitt, Director of Business Development, Voltera, interview with TRC, 19 December 2023.
43 Terrawatt Infrastructure. Terawatt Launches Immediate Charging Opportunities at Commerce, CA Site. Terrawatt News, 6 February 2024, https://www.
terawattinfrastructure.com/blog/terawatt-launches-immediate-charging-opportunities-at-commerce-ca-site
44 California Transportation Commission. SB671 Clean Freight Corridor Efciency Assessment. CTC, 6 December 2023, https://catc.ca.gov/-/media/ctc-media/
documents/programs/sb671/sb671-nal-clean-freight-corridor-efciency-assessment-dor.pdf
45 CALSTART. CALSTART Begins Work on Plan for Zero-Emission Corridor Along Eastern Seaboard. CALSTART, https://calstart.org/calstart-announces-zev-corridor-
projectalong-i95/
46 TRC expertise gathered through manufacturer collaboration and vocational training program development.
47 Tom Swenson, Director of Global Regulatory Affairs, Cummins Inc., interview with TRC, 3 January 2024, and, Robert Carrick, Director of Low Carbon Vehicles, Vehicle
Velocity Group, interview with TRC, 23 December 2023.
48 Adler, Alan. Nikola electric truck recall price tag $61.8M. Freightwaves, 2 November 2024, https://www.freightwaves.com/news/nikola-electric-truck-recall-price-
tag-61-8m
49 Robert Carrick, Director of Low Carbon Vehicles, Vehicle Velocity Group, interview with TRC, 23 December 2023.
50 Robert Carrick, Director of Low Carbon Vehicles, Vehicle Velocity Group, interview with TRC, 23 December 2023.
51 California HVIP. Drayage Truck Funding from Ports of Los Angeles and Long Beach Still Available to Stack with HVIP. Funding Updates, 2 November 2023, https://
californiahvip.org/funding-updates/drayage-truck-funding-from-ports-of-los-angeles-and-long-beach-available-nov-14-to-stack-with-hvip/
52 McKerracher, Colin. Electric Vehicles and Clean Transport: 10 Things to Watch in 2024. Slide 8, BloombergNEF. 8 January 2024.
53 Adler, Alen. Volvo Group wins bid for bankrupt Proterra battery assets. FreightWaves, 10 November, 2023, https://www.freightwaves.com/news/volvo-group-wins-
bid-forbankrupt-proterra-battery-assets
54 Gomes, Nathan. Cummins, Daimler, PACCAR form joint venture for US battery cell production. Reuters, 6 September 2023, https://www.reuters.com/business/
autostransportation/cummins-daimler-form-joint-venture-battery-cell-production-us-2023-09-06/
55 Department of Energy. Biden-Harris Administration Announces $3.5 Billion to Strengthen Domestic Battery Manufacturing. DOE, 15 November 2023, https://www.
energy.gov/articles/biden-harris-administration-announces-35-billion-strengthen-domestic-battery-manufacturing
56 Eckert, Nora. UAW Strike Cost Ford $1.7 Billion in Prot. The Wall Street Journal, 30 November 2023, https://www.wsj.com/business/autos/ford-lost-1-7-billion-in-prots-
fromuaw-strike-ffdbd9f3
57 Virginia Hewitt, Director of Business Development, Voltera, interview with TRC, 19 December 2023.
58 Virginia Hewitt, Director of Business Development, Voltera, interview with TRC, 19 December 2023.
59 Virginia Hewitt, Director of Business Development, Voltera, interview with TRC, 19 December 2023.
60 GNA analysis based on industry estimates.
61 Penske Truck Leasing. Penske adds Ford E-Transit cargo vans to its rental and leasing eet. Penske, 18 April 2022, https://www.pensketruckleasing.com/newsroom/
penskeadds-ford-e-transit-cargo-vans-to-its-rental-and-leasing-eet/
62 Velocity Vehicle Group. Velocity Vehicle Group Purchases 200 Battery-Electric Trucks for California Truck Rental & Leasing Operations. Global Newswire, 22 March
2023,https://www.globenewswire.com/news-release/2023/03/22/2632354/0/en/Velocity-Vehicle-Group-Purchases-200-Battery-Electric-Trucks-for-California-Truck-
Rental-Leasing-Operations.html
63 O’Connor, Erin. Mack MD Electric Trucks Now Have Special Leasing Option. NGT News, 30 October 2023, https://ngtnews.com/mack-md-electric-trucks-now-
havespecial-leasing-option
64 Electrication Newsletter. Q4 2023. Issue 2, and, Exelon Corporation, interview with TRC, 11 January 2024.
State of Sustainable Fleets 2024 Market Brief 63
HYDROGEN VEHICLES
Big players rally around regional hubs to launch an affordable
hydrogen economy
Adoption barriers that have plagued the hydrogen vehicle market for decades — fuel price and
accessibility remained entrenched in 2023. Nationally, the average retail price nearly doubled from a
mid-2022 price of $16.34/kg, with light-duty stations in California charging between $20/kg and $36/kg.1,2
Experts project that prices will have to reach $8-10/kg to be competitive with diesel.3 When the state’s
network failed to reach its growth target and the legislature recalled $60 million allocated for station
development in FY2024, administrators agged that expansion of fueling infrastructure — including
for commercial vehicles — would rely on increased levels of private and federal funding. While many
eets surveyed for this year’s assessment view hydrogen as a promising alternative to diesel, as well as a
necessary ZE alternative to battery-based powertrains, costs are a top concern.
State of Sustainable Fleets 2024 Market Brief 64
A unique federal program aims to break down
these barriers with scaled long-term investments
nationwide. In the third quarter of 2023, the DOE
released $7 billion in funding for seven hydrogen
hub projects (the H2 Hubs) proposed across 16
states.4 Reducing the price of fuel is a core goal
linked to the federal Hydrogen Shot initiative,
which aims to reduce production costs to $1/kg
over the next decade. These seven production
and distribution hubs are expected to catalyze
more than $40 billion in private investment and
create tens of thousands of “good paying”
jobs, some of them directly supporting on-
road transportation.5 Awardees are in contract
negotiations through 2024, and it will be several
years before the H2 Hubs meaningfully impact
fuel price and supply, but advocates assert
that the program reduces the risk for investors
exploring hydrogen fuel and vehicle production
today.
The H2 Hubs program is not the only factor
pointing to an affordable domestic hydrogen
economy. Several private investments aim to
expand the domestic supply of key production
equipment.6 Nel, a leading producer of
electrolyzers, a critical component of hydrogen
production, secured a $10 million grant from the
State of Michigan to develop a gigafactory,
and Cummins began expanding its domestic
electrolyzer production to support forecasted
fuel demand.7,8 New projects to develop zero-
carbon hydrogen were announced right on the
heels of the Hub awards, as well. GE Vernova
and equipment provider Next Hydrogen Solutions
agreed to collaborate on a renewably powered
electrolytic power conversion system.9 Energy
developers Copenhagen Infrastructure Partners
and Tenaska plan to develop gigawatt-scale
production facilities for hydrogen, ammonia,
sustainable aviation fuel, and other fuels for end-
markets that include on-road transportation in the
U.S. and globally.10 H2B2 began producing one
ton of zero-carbon hydrogen daily that could fuel
15 fuel cell tractors running approximately 450
miles per day at its new plant in Fresno, California,
and is expanding to three tons per day by mid-
2024 by incorporating a dedicated photovoltaic
array into its power source portfolio.11,12 These
projects demonstrate the essential role of
strategic partnerships and public incentives
spurred by federal targets.
Reducing the price of fuel
is a core goal linked to
the federal Hydrogen Shot
initiative, which aims to reduce
production costs to $1/kg over
the next decade.
State of Sustainable Fleets 2024 Market Brief 65
SIDEBAR: HOW WILL FLEETS FUEL?
Although the sample size of eets using hydrogen vehicles is the smallest of any clean technology in the
annual survey, their experience offers a glimpse into future end-user demand. Survey results indicate that these
eets expect high reliance on public fueling. Of the eets currently using FCEVs in this year’s survey, 55% are
“very” dependent and 39% are “somewhat” dependent on cost-effective public fueling facilities becoming
available in the next two to ve years. When asked
about their biggest barriers to refueling with hydrogen,
eets most frequently pointed to “limited number of
solutions providers,” “cost,” and “public/local authority
approval.” Fleets that responded about barriers to
adopting H2 fueling on-site had the greatest presence
in regional (<250 mi/day) and long-haul (>250 mi/day)
goods movement and transit agencies. Investors and
infrastructure providers will need to focus on solutions to
broaden fuel availability and cost, perhaps even more
so than in the battery vehicle charging sector.
Momentum in the public and private sectors is
subject to a variety of highly dynamic factors.
Carbon credit pricing, electric utility costs,
and new vehicle technology operating costs
will vary by state, project, and product, while
macro-economic factors including ination and
political priorities will have strong sway in this
budding market. One critical development was
the controversial draft terms for the Hydrogen
Production Tax Credit (also known as 45V). Many
proposed H2 Hubs and other projects aim for a
zero-CI standard, but the draft terms released in
December indicate that deep system changes to
supply chain reporting and multi-party operating
schedules may be required for a project to
qualify for these benets. If passed, these terms
could render many projects economically
infeasible.13 Stakeholders observed that delays
from the IRS on this and other guidance have
also tempered condence in project timelines.
The IRS is expected to address the large volume
of comments and release a nal ruling that will
be very consequential for future investment and
hydrogen fuel costs by mid-2024. Meanwhile,
state policies are scarce but could be expected
to emerge once local policymakers see signs of a
hydrogen economy that can retain and attract
job-generating investments that leverage existing
infrastructure, available energy resources, and
workforce.
In 2023, the DOE released
$7 billion in funding to
seven hydrogen hub
projects across 16 states.
“Yard space is precious, so
onsite hydrogen fueling
infrastructure will have to
address that constraint. We
look forward to evaluating
solutions from the industry.”
– Ryan Kocher, Director of Emerging
Equipment Technology, Knight-Swift
Transportation, Arizona
OEMs opened tractor order
books and pursued niche
applications
Leading manufacturers Kenworth, Peterbilt,
and Toyota announced a 2023 commercial
production schedule for hydrogen fuel cell
versions of their popular Class 8 T680 and 579
tractors.14 As of January 2024, PACCAR’s
brands had collected deposits for both models
from more than 150 customers but indicated
that production would not begin until 2025.15
Meanwhile, in 2023, Hyundai launched its project
State of Sustainable Fleets 2024 Market Brief 66
running 30 Xcient trucks in a California eet, the
largest demonstration of this technology in the
country.16 The demonstration runs into 2024
and Hyundai has indicated intent to start taking
orders this year.
Leading startup Nikola began producing the
fuel cell version of its Tre tractor at its new facility
in Arizona, which is designed to produce 2,400
battery-electric and hydrogen fuel cell trucks
per year.17 Between July and December 2023,
the company delivered 35 fuel cell trucks to
retail distributors, and 10 were delivered to Biagi
Brothers in February 2024.18,19 Another seven
were deployed in eet pilots, technician training
programs, and customer demonstrations. Nikola
was the primary fuel cell truck vendor for eets
participating in a popular California rebate
program in 2023, holding 355 of the 362 vouchers
awarded for fuel cell trucks, although none had
been redeemed as of February 2024.20
Later this decade, leading OEMs Volvo, Daimler,
and GM aim to begin offering commercial
hydrogen-powered models in the U.S. In 2023,
Volvo and Daimler continued to test their jointly-
developed cellcentric fuel cell technology
on their respective truck platforms in Europe,
working towards North American market
launches in the second half of the 2020s.21,22
GM is testing its Hydrotec fuel cell technology in
niche heavy-heavy duty service by partnering
with vendors Autocar and Komatsu on high
power load needs such as mining.23 Hydrogen
fuel cell’s long duration and steady performance
cycle offers a low-emission solution for eets that
are seeking a zero tailpipe emissions prole but
run long shifts in rugged conditions which are not
compatible with battery-electric technologies
today.
Market volumes of FCEVs delivered are lower
than other drivetrains in this brief. While the
transit sector has been the beachhead
application for hydrogen fuel cell vehicles,
“Cost of delivered liquid
hydrogen is a challenge that
the whole industry will need to
work together to address. We
see promise in this technology.”
– Roland Cordero, Director of
Maintenance and Vehicle Technology,
Foothill Transit, California
State of Sustainable Fleets 2024 Market Brief 67
deliveries fell into the low 20s, a 50% drop from
2022.24 However, eet commitments foretell a
rebound starting in California this decade. Transit
agency procurement plans and announced
orders illustrate how eets plan to comply with
the state’s Innovative Clean Transit rule, which
requires public transit agencies to adopt a ZE
purchasing standard by 2030 and a ZE eet
by 2040. Adoption roadmaps submitted to the
state suggest that fuel cell buses will make up
about 40% and 21% of small and large agency
new acquisitions by 2040, respectively. Agency
roadmaps indicate that nearly 200 fuel cell
buses will be purchased by 2025, and that
would nearly triple between 2025 and 2030.
In 2023, Foothill Transit, Santa Cruz MTD, and
SamTrans approved and/or purchased more
than 100 vehicles.25,26,27 Leading providers Trillium
and ANGI committed to develop a hydrogen
fueling station for Santa Clarita Transit, a critical
step in the agency’s fuel cell bus purchasing
schedule.28 Adoption spread beyond California:
Pennsylvania Transportation Authority ordered
10 vehicles from leading provider New Flyer.29
Transit agency reports indicate that hydrogen
fuel cell buses are the preferred ZE technology
when routes are longer; climate and/or terrain
require durable, long-range and quick-fueling
solutions; and depot space constraints require
eets to economize their fueling infrastructure
footprint. For many, one tank capable of fueling
a bus within 15-20 minutes is easier to t into
existing depots than multiple charging stations
with supporting infrastructure.
A Kenworth/Peterbilt/Toyota
collaboration, Nikola,
and Hyundai all announced
production schedules or began
deliveries of fuel cell
tractors in 2023.
State of Sustainable Fleets 2024 Market Brief 68
Electrolysis
(zero carbon)
Electrolysis
(grid average)
Electrolysis
(grid average) RNG (SMR)
Baseline: Diesel ICE (gCO2e/mi.) 1,876
Hydrogen ICE (gCO2e/mi.) 550 4,526 871 1,873
% Improvement over Baseline -71% 141% -54% 0%
Hydrogen Fuel Cell (gCO2e/mi.) 466 3,838 739 1,589
% Improvement over Baseline -75% 105% -61% -15%
Combustion hydrogen
drivetrains may address
near-term pain points,
but big questions remain
Hydrogen-focused investments in ICE
architectures are growing. Like natural gas,
hydrogen can be used in combustion engines,
leveraging the ICE architecture that is familiar
to eets and manufacturers. Some expect that
hydrogen combustion engine models could be
swapped into existing ICE-powered vehicles with
minimal cost compared to purchasing a new
fuel cell or battery-electric truck. This approach
could help eets begin using hydrogen sooner
than if they waited for access to fuel cell
vehicles, thus creating the demand needed to
stimulate fuel production and lower fuel and
even vehicle costs. Some argue that it would
also allow eets and the communities they work
with to become comfortable with hydrogen,
smoothing the path for fuel cell vehicle
deployments.30
Combustion is never 100% ZE, and while
hydrogen combustion emits relatively low levels
of NOx and zero tailpipe GHGs, there are various
fuel production pathways that determine its real
emissions advantage. Like electricity, the real
CI of hydrogen depends on the resources used
for production and distribution. Independent
estimates summarized in Table 4 suggest that
a hydrogen combustion vehicle will generally
be 18% more carbon intensive to operate than
a fuel cell vehicle on a well-to-wheel basis.
These calculations illustrate that emissions
reductions are deepest relative to diesel when
an ICE is fueled with hydrogen produced
with zero-carbon electricity, while hydrogen
produced with grid electricity generates
signicant emissions increases over diesel.
Given the sensitivity of a vehicle’s emissions
prole to the lifecycle of its fuel, it is important
that fuel producers work with stakeholders to
communicate transparently about the emissions
proles of feedstocks and fuel production
processes to regulators, manufacturers, and
eets.
Some experts expect that
hydrogen combustion
engine models could be
swapped into existing ICE-
powered vehicles with
minimal cost compared to
purchasing a new fuel cell or
battery-electric truck.
Table 4: Representative lifecycle GHG emissions, or carbon intensity (CI), modeled for a Class 8 Truck performing 200-mile trips on
three different fuel-engine architectures using hydrogen produced from four different energy sources.
State of Sustainable Fleets 2024 Market Brief 69
A core question is whether hydrogen combustion
technology would be widely used by eets that
will not otherwise be able to use fuel cell or
even battery-electric options. Proponents point
to eets whose capital resources, geographic
location, and/or duty cycle prevent them
from using any ZE option this decade. Skeptics
question how the architecture will be treated
under state ZE rules and standards. More
jurisdictions are adopting ICE bans while failing to
bring forward accessible and affordable solutions
for the hard-to-abate sectors such as long-haul,
construction, and mining. Stakeholders have
cautioned against blanket ICE bans that prevent
eets from pursuing fuels and architectures that
are suitable for their businesses and achieve
a lower-than-diesel emissions prole. In 2022,
Daimler Truck & Bus requested that EPA and
CARB protect these options, but no action has
been taken to date.31 Community opinions on
combustion and hydrogen are also in ux. The
industry is investing in bringing H2 ICE technology
to market over the next few years, generating
the testing and in-use data needed to evaluate
these questions.
New data in 2025 will inform these discussions.
Cummins expects to begin testing its X15H
engine in 2025 with partners, including
Terex, and expects it to meet EPA’s MY2027
standard.32 Powertrain and components provider
Westport demonstrated its high-pressure direct
injection fuel system for hydrogen in a Class 8
tractor and reported signicant performance
gains over diesel.33 Several months later it
announced plans to partner with Volvo on
development.34 PACCAR’s Peterbilt signaled
intent to enter the market when it displayed a
hydrogen combustion Class 8 truck in October,
although it did not publicly discuss next steps
or partnerships.35 With strong track records
developing alternative fuel technologies and a
committed customer base, these manufacturers
are motivating some fuel cell producers to
expand their offering. In early 2024, Bosch said
it will launch a hydrogen combustion engine
within the year.36 Bosch provides fuel cell stacks
to manufacturers in the U.S., Europe, and China,
and is exploring opportunities with the DOE’s
Hydrogen Hub program during the coming years.
The industry is investing in
bringing H2 ICE technology
to market over the next few
years, generating the testing
and in-use data needed to
evaluate the tradeoffs with fuel
cell as well as battery electric
alternatives.
State of Sustainable Fleets 2024 Market Brief 70
Fueling holds steady, but
station development pulls
back due to soft demand
Making hydrogen is complex and expensive,
and the progress made in 2023 suggests that
new investments and facilities have a long road
to protability. Domestic hydrogen supplies
have more than doubled since 2021, with more
than 20 million metric tons (MMT) of capacity
documented in late 2022.37,38 Yet most capacity
remains in early development. Only 10% of the
production capacity announced between 2021
and 2022 (12 MMT) had reached nal investment
decision (FID) by mid-2023 and only 15% of the
announced projects had reached FID as of
year-end.39,40 In California, the nations’ leading
state for on-road hydrogen use, consumption has
been at since Q2 2022 and does not show signs
of short-term growth.41 The slow rate of progress is
generally attributed to the high costs of launching
a complex new industry. While projects scoped
to produce green hydrogen have become the
most popular, they can also be the most difcult
to execute due to uncertainty around federal
tax credits, as well as regulations for renewable
power sources. Eligibility terms for the federal
45V hydrogen production tax credit that were
released at the end of 2023 raised alarms, and
stakeholders entered 2024 in hot debate over
their potential climate and economic impacts,
described in more detail at the start of this
chapter.
The emergence of small-scale hydrogen
production illustrates these tradeoffs. Emissions
goals vary by eet and jurisdiction, and some
stakeholders are advocating for policies that
incentivize fuel production to meet local climate
targets by using accessible and affordable
feedstocks rather than require a universal
standard achievable by only a few. Expanding
supply quickly with diverse feedstocks could
achieve the economies of scale necessary to
facilitate a zero-CI standard over time. Natural
gas developer Bayotech is already putting
this philosophy into practice with small-scale
production designs that leverage existing
resources to meet local needs.42 In 2023, it
opened its rst such facility in Missouri to support
partners New Flyer and Nikola, and it is on
track to open another near California’s Port of
Stockton in mid-2024. Bayotech’s modular systems
produce up to 1,000 kilograms of hydrogen daily.
Public station expansion lags and is expected
to fall further behind due to soft demand.
Stakeholders increasingly point to heavy-duty
trucks and buses as a primary market opportunity
for hydrogen technology and most of the new
proposed fuel production projects are designed
for HDV operations.43 This perspective highlights
the drawbacks of the existing fueling network that
is designed for cars and cannot accommodate
HDVs at commercial scale. Although the station
count in California grew slightly in 2023, the state
reported low uptime rates between 45% and
77%, and it no longer expects to meet the 2024
and 2025 growth targets.44,45 Shell delivered a
signicant setback when it cancelled its grant
agreement to build 51 stations with the California
Energy Commission (CEC). In early 2024 Shell also
decided to close its existing light-duty vehicle
fueling network.47 While some existing providers
including Shell have loosely signaled that they
are pivoting to meet the expected demands
of truck eets, and new providers such as HYLA
are actively developing commercial fueling sites
for HDVs with partners including Voltera and
FirstElement, widespread eet access to public
fueling resources is several years out.48,49,50
Public station expansion — so far
focused mostly on the light-duty
market — lags and is expected to fall
further behind due to soft demand.
Most newly proposed fuel
production projects are
designed for HDV.
Nationally, the average retail
price of hydrogen nearly
doubled from a mid-2022
price of $16.34/kg, with light-
duty stations in California charging
between $20/kg and $36/kg.
State of Sustainable Fleets 2024 Market Brief 71
What transit eets have
learned from onsite fueling
Transit service has been a leading application for
hydrogen fuel cell vehicles and early adopters’
approach to fueling offers a roadmap for wider
adoption. One of the leading advantages of
hydrogen fuel cell buses over battery-electric
buses is their fueling footprint. Many transit
agency depots are space-constrained but
require on-site fueling to avoid service delays.
Battery-electric operations may require a one-
to- one or similar ratio of buses and chargers, an
often impossible spatial commitment for many
transit eets. Hydrogen-powered buses solve
this problem by requiring only one fuel tank
to ll multiple vehicles on a diesel-equivalent
schedule (tank size varies by eet).51 This
avoids re-allocating fueling areas, bus bays,
or dwelling areas on eets’ depots, or even
purchasing additional land to accommodate
ZE operations, as some eets report they must
do to accommodate BEVs. The time and
cost of installation is also signicantly lower for
hydrogen fuel than electric charging stations,
particularly for eets that would require a utility
service upgrade to meet the load of a battery-
electric eet. While installing a hydrogen tank
and dispenser does involve some cost and effort,
most eets today contract a hydrogen fuel
retailer to deliver fuel, mirroring their approach
with diesel or natural gas.
A select few agencies have invested in their own
hydrogen fueling facilities. AC Transit in California
and Champaign-Urbana Mass Transit District in
Illinois produce their own fuel and claim that
experience with natural gas fueling and vehicle
operations signicantly smooths the adoption
curve for transit agencies when they move to
hydrogen.52 While the investment has allowed
both eets to weather the rise in retail fuel prices
and exercise control over their eets’ carbon
footprint, representatives state that planning,
permitting, and construction were complex and
required a committed team of experts. Given
the overall effort, both agencies emphasize the
value of future-proong designs for an optimal
outcome.
Hydrogen-powered buses
solve an onsite fueling
space constraint problem
by requiring only one fuel tank
to ll multiple vehicles on a
diesel-equivalent schedule.
State of Sustainable Fleets 2024 Market Brief 72
INDUSTRY PERSPECTIVE – CALIFORNIA HYDROGEN
BUSINESS COUNCIL
The hydrogen transportation market continues
to build in California and lay groundwork
nationally with the support of major federal,
state, and private investment. At the federal
level, California’s ARCHES Hub was announced
in October of 2023 as one of the two largest
awards; up to $1.2B, along with the Hy Velocity
hub in Texas. Five other hubs were also
announced: Appalachia ARCH2 (West Virginia,
Ohio, and Pennsylvania), Heartland (Minnesota,
North Dakota, and South Dakota), Mid-Atlantic
MACH2 (Pennsylvania, Delaware, and New
Jersey), Midwest MachH2 (Illinois, Indiana, and
Michigan), and Pacic Northwest (Washington,
Oregon, and Montana).53 The ARCHES hub also
boasts another nearly $12B in private and state
funding.
While these inject much-needed resources
into market building, on December 22, 2023,
the much-anticipated draft Section 45V Credit
for Production of Clean Hydrogen notice of
proposed rulemaking (NPRM) was released, and
counter to legislative intent, proposed extremely
restrictive rules on clean hydrogen production,
which potentially jeopardizes the ability of many
hydrogen hubs to realize the full value of the
award. These standards, if enacted as drafted,
would materially impact the viability of many of
the projects in the seven hubs, as the standards
were not in place when hubs were designed
and applied for DOE hydrogen hub program
funding.54 Industry replied in great numbers to
counter the implementation of the rule as written
and offer some solutions. Discussions are ongoing
into 2024, however no timeline for release of
the nal guidance has been publicized to
date. California’s Clean Transportation Program
funding was re- approved in 2023 to include
HD ZEVs and infrastructure, including fuel cell
electric trucks, buses, off-road equipment, and
hydrogen refueling infrastructure at a minimum
of 15% of the funding for HD ZEVs, with LD FCEV
infrastructure funding resuming again in 2026.
In 2023, vehicle manufacturers continued to
demonstrate and deploy hydrogen-powered
Class 8 tractor trucks in demonstrations
throughout California. Manufacturers Nikola,
Hyundai, Daimler Truck North America, Cummins,
Hyzon, and a partnership between Toyota and
Kenworth demonstrated and delivered their
trucks— both fuel cell electric and hydrogen
internal combustion vehicles — at ports,
warehouses, and along HD corridors to beta-test
the technology and commercial readiness.
The fuel cell electric (transit) bus (FCEB) market
continued to grow. As of December 2023,
there were 66 FCEBs in operation in California,
with 103 more funded. Transit continues to
lead HD FCEV adoption. California transit
agencies are meeting the Innovative Clean
Transit rule requirements with FCEBs based on
performance factors that cannot be met by
other alternative vehicle technologies. LD FCEV
numbers have plateaued at 18,000 fuel cell
cars, as manufacturers, Toyota, Honda, and
Hyundai, delivered fewer vehicles to dealerships
at the end of 2023 into 2024, due to hydrogen
fuel availability challenges related to disruptions
in the retail hydrogen supply chain at the 55
hydrogen stations available in California.55
State of Sustainable Fleets 2024 Market Brief 73
The scale of hydrogen production projects varies
from sites across California and the rest of the
country. Depending on eet sizes, projects can
range from 5,000 to more than 30,000+ kg/day
production. New and incumbent companies are
producing hydrogen using low- or zero-carbon
renewable feedstocks that will reduce the cost
of hydrogen for a better TCO for eet operators.
This effort should be bolstered by the ARCHES
Hub.
Dispensed hydrogen price continues to be a
challenge and must reach $5-8kg to compete
with today’s diesel prices, even with the
increase in oil prices. These price levels may be
achieved through hydrogen consumption at
scale, especially with California’s LCFS program
incentivizing the use of low/negative carbon
hydrogen for transportation. The LCFS took
comments in 2023 and an updated version is
expected for 2024. In 2022, the LCFS reduced
GHG emissions by 26 million metric tons or 5.8
million gas-powered cars off the road; its success
has spurred other states to follow California’s
lead.56
Private investments, hydrogen hubs, and
other government programs are expected to
facilitate the installation of hydrogen refueling
infrastructure and services along nationwide
transportation corridors. In California there are
55 retail LD and three HD hydrogen stations
in operation and publicly accessible, today.
Nine additional HD stations are funded and in
development — only within California — with
many more in the planning stage through
federal and state investments. However,
vehicle manufacturers (Hyundai and Nikola)
are deploying prefabricated hydrogen
dispensing units, behind the fence, to support
precommercial FCET demonstration projects,
ahead of permanent hydrogen fueling
resources.
Overall, eets can expect costs for hydrogen-
powered HD vehicles and hydrogen to decline
over the next 10-years as these vehicles
achieve scale and production volumes begin
to compete with diesel and other clean vehicle
technologies. With government programs that
support signicant market development, like
California’s Hybrid and Zero-Emission Truck and
Bus Voucher Incentive Project, eets can meet
their ZE and operational performance goals
more readily with hydrogen. In 2035 FCET sales
are modeled to shift to exponential growth.57 This
level of scale will require a similar level of fueling
infrastructure to precede vehicle delivery.
Visit the California Hydrogen Business Council website at www.californiahydrogen.org for transportation resources.
All opinions in the above Industry Perspective represent the opinion of the aforementioned organization and do not reect the
opinions of TRC Companies, Inc. (TRC) or the report sponsors.
1 Alternative Fuels Data Center. Clean Cities Alternative Fuel Price Report. 2023 edition through October, https://afdc.energy.gov/les/u/publication/alternative_fuel_
price_report_october_2023.pdf
2 California Air Resources Board. 2023 Annual Evaluation of Fuel Cell Electric Vehicle Deployment
and Hydrogen Fuel Station Network Development. December 2023, https://ww2.arb.ca.gov/resources/documents/annual-hydrogen-evaluation
3 Gladstein, Neandross & Associates (GNA). State of Sustainable Fleets 2022 Market Brief. May 2022, Santa Monica, CA, https://www.stateofsustainableeets.com/
download-2022-report/
4 The White House. Biden-Harris Administration Announces Regional Clean Hydrogen Hubs to Drive Clean Manufacturing and Jobs. 13 October 2023, https://www.
whitehouse.gov/brieng-room/statements-releases/2023/10/13/biden-harris-administration-announces-regional-clean-hydrogen-hubs-to-drive-clean-manufacturing-
andjobs/
5 The White House. Biden-Harris Administration Announces Regional Clean Hydrogen Hubs to Drive Clean Manufacturing and Jobs. 13 October 2023, https://www.
whitehouse.gov/brieng-room/statements-releases/2023/10/13/biden-harris-administration-announces-regional-clean-hydrogen-hubs-to-drive-clean-manufacturing-
andjobs/
6 Department of Energy (DOE). DOE National Clean Hydrogen Strategy Roadmap. Figure 26, June 2023, \\stsantamonicawest.le.core.windows.net\shared\Shares\
Data\Users Shared Folders\Peter O\Programs Folder\Business Development\Hydrogen\US DOE-national-clean-hydrogen-strategy-roadmap.pdf
State of Sustainable Fleets 2024 Market Brief 74
7 Nel Asa. Nel ASA: Nel has selected Plymouth in Michigan for its next gigafactory. Nel Asa Press, 26 September 2023, https://nelhydrogen.com/press-release/nel-asa-\\
nelhas-selected-plymouth-in-michigan-for-its-next-gigafactory/
8 Cummins Inc. ACCELERA Marks Start of Operations for Electrolyzer Production in Fridley, Minnesota. Cummins News, 19 May 2023, https://investor.cummins.com/news/
detail/610/accelera-marks-start-of-operations-for-electrolyzer
9 GE Vernova. GE Vernova and Next Hydrogen sign MoU to integrate electrolysis technology with power systems to produce green hydrogen. GE Vernova Press, 21
November 2023, https://www.ge.com/news/press-releases/ge-vernova-and-next-hydrogen-sign-mou-to-integrate-electrolysis-technology-with-power-systems-
producegreen-hydrogen
10 Burgess, Molly. CIP and Tenaska team up on US green hydrogen developments. Gasworld.com, 27 October 2023, https://www.gasworld.com/story/cip-and-
tenaskateam-up-on-us-green-hydrogen-developments/2129537.article/
11 Balaraman, Kavya. H2B2’s California facility to produce up to three tons of green hydrogen per day. PV Magazine, 2 November 2023, https://pv-magazine-usa.
com/2023/11/02/h2b2s-california-facility-to-produce-up-to-three-tons-of-green-hydrogen-per-day/
12 Assumes tractors use 9 kilograms of fuel for every 100 kilometers traveled (ICCT, 2022, https://theicct.org/publication/fuel-cell-tractor-trailer-tech-fuel-jul22/ ), and carry
70kg of fuel on-board (industry vehicle specication).
13 Foley Hoag Staff. Treasury and IRS Propose Long-Awaited Regulations for the Ination Reduction ACT’s Hydrogen Production Tax Credit (Section 45V). Foley Hoag, 5
January 2024, https://foleyhoag.com/news-and-insights/publications/alerts-and-updates/2024/january/treasury-and-irs-propose-long-awaited-regulations-for-
theination-reduction-acts-hydrogen-product/
14 Toyota. PACCAR and Toyota Expand Hydrogen Fuel Cell Truck Collaboration to Include Commercialization. Toyota Press Room, 2 May 2023, https://pressroom.toyota.
com/paccar-and-toyota-expand-hydrogen-fuel-cell-truck-collaboration-to-include-commercialization/
15 Adler, Alan. Hydrogen rises at CES. Freight Waves, 12 January 2024, https://www.freightwaves.com/news/hydrogen-rises-at-ces
16 Bates, Michael. FirstElement Fuel, Hyundai Motor Testing Real-World Fuel-Cell Truck Operations and Refueling. NGT News, 14 March 2023, https://ngtnews.com/
rstelement-fuel-hyundai-motor-testing-real-world-fuel-cell-truck-operations-and-refueling
17 Nikola. Nikola Celebrates the Commercial Launch of Hydrogen Fuel Cell Truck in Coolidge, Arizona. Nikola Press, 28 September 2023, https://nikolamotor.com/
nikolacelebrates-the-commercial-launch-of-hydrogen-fuel-cell-electric-truck-in-coolidge-arizona/
18 Nikola. Successful Launch: Nikola Produces 42, Wholesales 35 Hydrogen Fuel Cell Electric Trucks for Customers in U.S. and Canada in 2023. Nikola Press, 4 January 2024,
https://nikolamotor.com/press_releases/successful-launch-nikola-produces-42-wholesales-35-hydrogen-fuel-cell-electric-trucks-for-customers-in-u-s-and-canada-in-
2023/,and, TRC analysis of new vehicle registration data provided by S&P Global Mobility.
19 Biagi Bros. LinkedIn Post. LinkedIn, 03 March 2024, https://www.linkedin.com/posts/biagibros_biagibros-sustainability-hydrogenfuelcell-activity-7166114356231856129-
lFu_/?utm_source=share&utm_medium=member_desktop
20 California HVIP. Impact – Vehicle Map and Data. HVIP, https://californiahvip.org/impact/#deployed-vehicle-mapping-tool
21 HDT Staff. Volvo Trucks Road-Tests Hydrogen-Electric Models. HDT News, 17 May 2023, https://www.truckinginfo.com/10199042/volvo-trucks-road-tests-
hydrogenpowered-electric-models
22 HDT Staff. Daimler to Test Hydrogen Fuel Cell Trucks with Customer Fleets. HDT News, 19 December 2023, https://www.truckinginfo.com/10212591/daimler-to-
testmercedes-benz-genh2-truck-with-customer-eets
23 General Motors. GM and Komatsu Collaborate on Hydrogen Fuel Cell-Powered Mining Truck. GM Newsroom, 12 December 2023, https://news.gm.com/newsroom.
detail. html/Pages/news/us/en/2023/dec/1212-hydrotec.html
24 TRC analysis of new vehicle registration data provided by S&P Global Mobility.
25 Metro Magazine Staff. Foothill Transit Orders 19 ENC Hydrogen Fuel-Cell Buses. Metro Magazine, 26 May 2023, https://www.metro-magazine.com/10199612/foothill-
transitorders-19-enc-hydrogen-fuel-cell-buses
26 Santa Cruz Metropolitan District. METRO to Purchase 57 Zero-Emissions, Fuel Cell Electric Buses. Santa Cruz Metro, 22 September 2023, https://scmtd.com/images/
department/ceo/METRO_HydrogenBusPurchase_Release092223FINAL.pdf
27 SamTrans. SamTrans Set to Make Largest Zero-Emission Bus Purchase in the Agency’s History. SamTrans, 6 December 2023, https://www.samtrans.com/news/samtrans-
setmake-largest-zero-emission-bus-purchase-agencys-history
28 Vontier. ANGI, Trillium Join Forces to Install First Hydrogen Station at Santa Clarita Transit Bus Depot. ALTfuels, 25 October 2023, https://altfuelscg.com/en/
infrastructureand-supply/us-angi-and-trillium-join-forces-to-install-rst-hydrogen-station-at-clarita-transit-bus-depot/
29 Mass Transit. SEPTA Board Approves Purchase of 10 New Flyer Fuel Cell Electric Buses. New Flyer, 2 March 2023, https://www.newyer.com/2023/03/septa-
boardapproves-purchase-of-10-new-yer-fuel-cell-electric-buses/
30 Ales Srna. Increase your H2 IQ: Overview of Hydrogen Internal Combustion Engine (H2ICE) Technologies. Department of Energy, Hydrogen and Fuel Cell Technologies
Ofce, 2022, Webinar. Slide 11.
31 Ales Srna. Increase your H2 IQ: Overview of Hydrogen Internal Combustion Engine (H2ICE) Technologies. Department of Energy, Hydrogen and Fuel Cell Technologies
Ofce, 2022, Webinar. Slide 27.
32 Cummins Inc. Terex Advance Signs Letter of Intent to Integrate and Offer Cummins X15H. Cummins News, 11 September 2023, https://www.cummins.com/news/
releases/2023/09/11/terex-advance-signs-letter-intent-integrate-and-offer-cummins-x15h
33 Westport Fuel Systems. Westport Showcases its Market Ready HPDI™ Fuel System, A Single Solution for Multiple Fuels at ACT Expo 2023. Westport News, 2 May 2023,
https://s26.q4cdn.com/361830528/les/doc_news/Westport-Showcases-its-Market-Ready-HPDIFuel-SystemA-Single-Solution-for-Multiple-Fuels-at-ACT-Expo-2023-2023.pdf
34 Greenhalgh, Keiron. Westport, Volvo Fuel System to Ink JV Agreements by January. Transport Topics, 13 November 2023, https://www.ttnews.com/articles/westport-
volvofuel-system
35 Lockridge, Deborah. Peterbilt Displays Hydrogen Combustion Engine Demonstrator. HDT Trucking, 24 October 2023, https://www.
truckinginfo.com/10208880/peterbilt-displays-hydrogen-combustion-engine-demonstrator?utm_source=newsletter&utm_medium=email&utm_
campaign=20231028_1705:63774a8994997b5ec0a78083:rm202310281430_NL-HDT-TopNews&omid=1009836656&cid=63466255259dfd68720b973b
36 Fisher, John. Bosch doubles down on hydrogen as key to trucking’s sustainable future. FleetOwner, 8 January 2023, https://www.eetowner.com/emissions-efciency/
article/21280329/bosch-plans-hydrogen-engine-to-go-with-its-fuel-cell-stack-as-tier-1-supplier-sees-h2-as-critical-part-of-truckings-sustainable-future
37 Satyapal, Sunita. U.S. Department of Energy Hydrogen and Fuel Cell Technologies Ofce Overview. U.S. Department of Energy, January 2021, Webinar, https://www.
energy.gov/eere/fuelcells/articles/us-department-energy-hydrogen-and-fuel-cell-technologies-ofce-overview
38 The White House. The Economics of Demand-Side Support for the Department of Energy’s Clean Hydrogen Hubs. White House Press, 5 July 2023, https://www.
whitehouse. gov/cea/written-materials/2023/07/05/the-economics-of-demand-side-support-for-the-department-of-energys-clean-hydrogen-hubs/
39 The White House. The Economics of Demand-Side Support for the Department of Energy’s Clean Hydrogen Hubs. White House Press, 5 July 2023, https://www.
whitehouse. gov/cea/written-materials/2023/07/05/the-economics-of-demand-side-support-for-the-department-of-energys-clean-hydrogen-hubs/
40 Hydrogen Council, McKinsey & Company. Hydrogen Insights: Hydrogen Project Pipeline Grows by 35% Since January 2023 Despite Macro-economic Headwinds.
Hydrogen Council, 12 December 2023, https://hydrogencouncil.com/en/hydrogen-project-pipeline-grows-by-35-since-january-2023/
41 California Air Resources Board, Low Carbon Fuel Standard Quarterly Data Spreadsheet. CARB, accessed 28 February 2023, https://ww2.arb.ca.gov/resources/
documents/low-carbon-fuel-standard-reporting-tool-quarterly-summaries
42 Fueling Net Zero: A Discussion on All Things Hydrogen. Advanced Clean Tech News, 20 December 2023, Webinar, https://www.act-news.com/webinar/fueling-net-zero-
adiscussion-on-all-things-hydrogen/
State of Sustainable Fleets 2024 Market Brief 75
43 Satyapal, Sunita. U.S. Department of Energy Hydrogen and Fuel Cell Technologies Ofce Overview. U.S. Department of Energy, January 2021, Webinar, https://www.
energy.gov/eere/fuelcells/articles/us-department-energy-hydrogen-and-fuel-cell-technologies-ofce-overview
44 California Air Resources Board. 2023 Annual Evaluation of Fuel Cell Electric Vehicle Deployment
and Hydrogen Fuel Station Network Development. December 2023, page 55, https://ww2.arb.ca.gov/resources/documents/annual-hydrogen-evaluation, State of
Sustainable Fleets 2024 Market Brief 74
45 California Air Resources Board. 2023 Annual Evaluation of Fuel Cell Electric Vehicle Deployment
and Hydrogen Fuel Station Network Development. December 2023, page 49, https://ww2.arb.ca.gov/resources/documents/annual-hydrogen-evaluation
46 California Air Resources Board. 2023 Annual Evaluation of Fuel Cell Electric Vehicle Deployment
and Hydrogen Fuel Station Network Development. December 2023, page iii, https://ww2.arb.ca.gov/resources/documents/annual-hydrogen-evaluation
47 Vaughn, Mark. Shell Closes its Hydrogen Stations in California. Autoweek.com, 15 February 2024, https://www.autoweek.com/news/a46791348/shell-closes-
hydrogenstations-california/
48 GE Vernova. GE Vernova and Next Hydrogen sign MoU to integrate electrolysis technology with power systems to produce green hydrogen. GE Vernova, 21
November, 2023, https://www.ge.com/news/press-releases/ge-vernova-and-next-hydrogen-sign-mou-to-integrate-electrolysis-technology-with-power-systems-
produce-greenhydrogen
49 Adler, Alan. Nikola gets nancial partner for 50 hydrogen stations. Freight Waves, 2 May 2023, https://www.freightwaves.com/news/nikola-gets-nancial-partner-for-50-
hydrogen-stations
50 Nikola. Nikola and FirstElement Fuel Forge 10-Year Strategic Partnership to Advance Hydrogen Fueling Infrastructure. Nikola Press, 20 December 2023, http://
nikolamotor.com/press_releases/nikola-and-rstelement-fuel-forge-10-year-strategic-partnership-to-advance-hydrogen-fueling-infrastructure/
51 TRC analysis of roadmaps submitted by California transit agencies per the Innovative Clean Transit rule, access at https://ww2.arb.ca.gov/our-work/programs/
innovativeclean-transit/ict-rollout-plans
52 Fueling Net Zero: A Discussion on All Things Hydrogen. Advanced Clean Tech News, 20 December 2023, Webinar, https://www.act-news.com/webinar/fueling-net-zero-
adiscussion-on-all-things-hydrogen/
53 Energy.gov. Biden-Harris Administration Announces $7 Billion for America’s First Clean Hydrogen Hubs, Driving Clean Manufacturing and Delivering New Economic
Opportunities Nationwide. 13 October 2023, https://www.energy.gov/articles/biden-harris-administration-announces-7-billion-americas-rst-clean-hydrogen-hubs-
driving
54 Blackmon, David. Treasury’s 45V Regulation Risks Killing US Hydrogen In the Cradle. Forbes, 25 February 2024, https://www.forbes.com/sites/davidblackmon/2024/02/25/
treasurys-45v-regulation-risks-killing-us-hydrogen-in-the-cradle
55 Hydrogen Fuel Cell Partnership. By The Numbers: FCEV Sales, FCEB, & Hydrogen Station Data. Hydrogen Fuel Cell Partnership, accessed April 2024, https://h2fcp.org/
by_the_numbers
56 State of Washington Department of Ecology. Webpage: Clean Fuel Standard. Accessed at https://ecology.wa.gov/air-climate/reducing-greenhouse-gas-emissions/
clean-fuel-standard
57 Fulton, Lew et al. California Hydrogen Analysis Project: The Future Role of Hydrogen in a Carbon-Neutral California. Final Synthesis Modeling Report. University of
California Davis Institute of Transportation Studies, 19 April 2023, https://escholarship.org/uc/item/27m7g841
State of Sustainable Fleets 2024 Market Brief 76
CONCLUSION
The past year has been both consequential and challenging for clean technology adoption by eets. It
was a year in which transformative new regulations by the EPA and the very large market of California
set the stage for a more rapid adoption of cleaner alternatives to diesel engines operating on fossil
fuels. It was a year of sustained, record funding and public and private investment to build the market
for RD, continue growth of RNG supply, and the initial projects intended to spark rollout of a nationwide
public and depot charging network. Fleets expressed strong demand for fueling associated with each
of these sources of cleaner energy, while the adoption of BEVs continued to grow rapidly and spread
to the broadest number of eet applications among clean technologies in this study. Increasingly each
solution demonstrates its t for specic applications while new supply and innovation makes them
increasingly successful and competitive. Nearly all of these will be crucial to transforming the market
sustainably.
It was also a year of public recalls of HD BEVs
by large and small manufacturers alike that
reinforced the iterative process of commercial
development and the value of safety protocols.
Ongoing delays installing and energizing
charging infrastructure, mostly in private depot
settings, revealed the pain points of closing the
infrastructure gap. These highlighted the pivotal
role that coordinated partnerships between
eets, utilities, and charging partners will play for
BEVs to scale. In many respects, 2023 described
a balance of peaks and valleys that may be the
norm for several years — exciting developments
punctuated by the unique challenges of
unprecedented goals.
The fundamentals nonetheless point toward
the broader conclusion of this year’s Market
Brief that while the path for clean vehicle
technologies is not smooth, nearly all of these
clean technologies will play an increasingly
important role for most eet managers.
State of Sustainable Fleets 2024 Market Brief 77
GLOSSARY
AFTC: Alternative Fuel Tax Credit
BD: Biodiesel
B5: Fuel blend with up to 5% biodiesel
B20: Fuel blend with between 6% and 20%
biodiesel
B100: Pure biodiesel fuel
BEV: Battery-electric vehicle
CARB: California Air Resources Board
CI: Carbon intensity, a measure of lifecycle
greenhouse gas emissions
CNG: Compressed natural gas
DGE: Diesel gallon equivalent (a unit of measure)
FCEV: Fuel cell electric vehicle
GGE: Gasoline gallon equivalent (a unit of
measure)
GHG: Greenhouse gas; synonym for carbon,
carbon-equivalent, or CO2e
HD: Heavy-duty
ICE: Internal combustion engine
LCFS: Low Carbon Fuel Standard regulation
LPG: Liqueed petroleum gas
MD: Medium-duty
NGV: Natural gas vehicle
NZE: Near-zero emission
OEM: Original equipment manufacturer
R99: Fuel blend with up to 99% renewable diesel,
the standard maximum blend
RD: Renewable diesel
rDME: renewable dimethyl ether
RFS: Renewable Fuel Standard, a federal
program
rLPG: Renewable liqueed petroleum gas, a.k.a.
renewable propane
RNG: Renewable natural gas
TCO: Total cost of ownership
ZE: Zero-emission
ZEV: Zero-emission vehicle
State of Sustainable Fleets 2024 Market Brief 78
METHODOLOGY
The State of Sustainable Fleets study relies on data published in industry, state, and federal databases;
industry reports; proposed and enacted policies; primary interviews with stakeholders; and the responses
of nearly 200 eets to an industry-wide survey. Information is gathered and analyzed by expert clean
transportation and energy consultants at TRC. This section describes the scope and methodology for
primary data collection; sources of public data are cited throughout the report.
Scope of Study
The survey targeted public and private eets
operating Class 2a-8 vehicles in the U.S. in the
following sectors: school, shuttle, state/county/
municipal, urban delivery, refuse, utility, transit,
regional-haul, long-haul, and off-road cargo
handling. Renewable fuels considered in this
study include alternatives in the diesel, propane,
natural gas, electricity, and hydrogen markets
Hybrid technologies were not studied.
Approach to Data
Throughout this study, a variety of data points
were collected from eets, vehicle technology
manufacturers, fuel providers, and industry
stakeholders including S&P Global Mobility,
Cummins, the Propane Education and Research
Council, and the North American Council
for Freight Efciency. TRC’s funding data is
generated regularly through its Funding 360
program using information from utilities and
federal, state, and local agencies.
TRC’s policy outlook is generated from ongoing
policy analysis through its Policy 360 program.
Vehicle registration, order, and deployment
estimates were based on data from IHS Markit,
state and federal grant awards, California large
transit agency Zero-Emission Bus Rollout Plans,
press releases, and TRC’s direct communications
with eets. Average model prices are based
on manufacturer-advertised base prices for
alternative fuel vehicles in each segment,
or where these prices are not available, on
advertised diesel or gasoline model base prices
are adjusted with industry-dened incremental
values appropriate to each alternative fuel
technology.
Estimates of the number of vehicles in operation
by eet type are derived from vehicle
registration, order, and deployment research
conducted by the State of Sustainable Fleets
team since 2020 and validated against industry
reports and input from leading early adopters.
All 2024 sponsors reviewed a draft of the
report for technical accuracy. TRC maintained
editorial control and decisions over which data,
feedback, and examples to publish. Only data
that were credible and accurate to the best
available knowledge of the assembled experts
were included.
The State of Sustainable Fleets 2024 Market Brief
represents a comprehensive, technology-neutral
analysis of the best data available today for on-
road commercial eets and off-road yard truck
eets. Future reports will update the analysis as
new, credible data become available.
State of Sustainable Fleets 2024 Market Brief 79
Survey Methodology
TRC administered an online survey over a six-
week period in September and October 2023
to identify trends and operational performance
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 eet vehicle technologies (diesel),
and use of renewable fuels that can be used
to power their relevant vehicle platforms
(renewable diesel, biodiesel drop-in blends,
renewable natural gas, renewable propane,
renewable electricity, renewable hydrogen).
Fleets were asked to compare each clean
drivetrain technology they had piloted or
purchased to their baseline technology of
gasoline and/or diesel. The survey did not ask
for comparisons between the clean vehicle
technologies.
stateofsustainablefleets.com
stateofsustainablefleets.com
Prepared By
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Supporting Sponsors
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