Policies Impacting Clean Fuel Use

Author and SeQuential Co-Founder Ian Hill (left) is working alongside colleagues, including co-founder and SeQuential COO Tyson Keever (right), to encourage fleet managers to implement cleaner fuels.
Author and SeQuential Co-Founder Ian Hill (left) is working alongside colleagues, including co-founder and SeQuential COO Tyson Keever (right), to encourage fleet managers to implement cleaner fuels.

There are many reasons to embrace cleaner fuels. Improved emissions, less toxicity, and carbon reduction are among the numerous benefits of moving away from fossil fuel use. According to the Natural Resources Defense Council (NRDC), nearly 12.6 million Americans are exposed to daily toxic air pollution from active oil and gas wells to transportation and processing facilities.

However, switching fuels for your fleet always carries some degree of complexity. Many busy fleet managers understandably find themselves needing some extra motivation to implement cleaner fuels. That motivation often comes in the form of public policy.

Many school districts have switched to cleaner fuels to meet goals set forth by lawmakers. With all levels of government grappling with how best to respond to climate change, this trend is likely to accelerate.

In fact, the NRDC reports that U.S. consumption of petroleum products is forecast to decrease through 2035 as fuel efficiency standards lead to cleaner-running vehicles. Read on for a primer on the common types of policy impacting clean fuel use.

Local Policies

While there are federal policies designed to promote cleaner fuels, they’re usually aimed at influencing the overall fuel supply rather than influencing the choices made by specific fleets. A recent report by the International Energy Agency suggests that countries with regulations or efficiency-based purchase incentives in place experienced fuel economy improvements 60 percent faster than countries without such policies.

The policies most likely to have a direct impact on a given district’s fuel use are set locally. These may be statewide laws, or city or county-specific ordinances. Either way, there are two primary types of policy set around clean fuels:

  1. Mandates: These policies typically require regulated participants to use specific fuels or meet specific emissions reduction goals. For example, Washington state has a mandate that requires public agencies to use either electric vehicles or biofuels to reduce emissions. Other states, including Oregon and Minnesota, require fuels sold in the state to be blended with a percentage of biofuel. Mandates can be formal laws applying to all fleets in the state, or less formal goals applying mainly to public agencies.
  2. Incentives: Some policies are designed to encourage the use of clean fuels, rather than require it. These are usually aimed at end consumers (such as individual drivers) and often take the form of tax breaks. However, some areas also offer grant monies, special financing rates, etc. for switching to more sustainable fuels.

Low Carbon Fuel Standards

Another way policy can help encourage shifts in fuel use is through something called a low carbon fuel standard. This type of policy—usually implemented at the state level—sets a target for reducing the carbon emissions coming from the transportation sector.

This is done by assigning a carbon intensity, a measure of lifecycle carbon emissions, to every fuel used in the state. Large users of fuel, usually distributors and other parties that import fuel into the state, are required to gradually reduce their carbon emissions by either using fuels with a lower carbon intensity or by purchasing “credits” generated by parties who achieve a lower carbon reduction than the current requirement.

Low carbon fuel standards are favored because of their ability to not only reduce carbon pollution but also to help build markets for cleaner fuels. The West Coast is leading the way on this type of policy, with successful programs being implemented in Oregon, California and British Columbia.

As policies aimed at reducing carbon pollution and cleaning up emissions continue to be implemented, the chance that your fleet may need to evaluate different options for fueling are high. Understanding the different types of policies that exist can help you be prepared to swiftly respond with the best and most cost-effective solution for your fleet.

Some fleets may look to replace aging vehicles with newer technology such as electricity or compressed natural gas. Others may look to switch from petroleum diesel to biodiesel in their existing equipment.

Whichever route you choose, moving to cleaner fuels can help your fleet’s emissions and help you meet ever-changing sustainability goals in one fell swoop.

Since co-founding SeQuential in 2003, Ian Hill has helped to direct the company’s state-level policy work, promoting the use of clean energy and clean fuels across the West Coast. He also oversees SeQuential’s flagship retail station in Eugene, Oregon.