ANAHEIM, Calif. — The Advanced Clean Transportation (ACT) Expo commenced Monday with the sixth release of TRC’s State of Sustainable Fleets report, which highlighted the shift in federal policy priority to conventional fuels, away from EVs, and the rise in renewable diesel.
Following the Biden administration, which delivered unprecedented funding to electric vehicles, including electric school buses, the State of Sustainable Fleets report highlights the Trump administration’s intent to roll back many of these programs. The 2025 report notes a period of peak uncertainty due to the regulatory transformation. It notes that the U.S. transportation policy landscape is evolving rapidly, and uncertainty remains on emissions regulations.
For instance, the report notes that executive orders have the potential to jeopardize the EPA Phase 3 GHG emissions regulations for heavy-duty vehicles and guidelines for power plants as well as halted the distribution of funds under the Infrastructure Investment and Jobs Act and Inflation Reduction Act, creating uncertainty for alternative fuel funding.
Where federal funding falls short, state and local funding exceeds. The report notes that more than 600 state and local programs totaling over $13.5 billion remain available for zero-emissions and near-zero-emissions projects, including natural gas, battery-electric, hydrogen and newer diesel vehicles.
Nate Springer, vice president of market development at TRC, commented during a media call discussing the report on the transition from a zero-emissions-friendly administration to one now favoring conventional energy sources, one of which is renewable diesel. RD saw a 28 percent increase in production in the first half of 2024 and is on track to reach 7.257 million gallons per day by the end of the year, exceeding the goal of 5 billion gallons per day.
Plus, the report noted an overall surge in natural gas, thanks to the release of the X15N engine by Cummins, which has increased Class 8 tractor registrations this year, after two years of declining registrations. However, natural gas school bus registrations saw the steepest drop, down 54 percent to 89 units. The authors attributed, in small part, the decline to Blue Bird selling off its natural inventory in 2023 and discontinuing the school bus offering in 2024.
The renewable natural gas market continues to expand nationally. Springer said that there are over 400 facilities producing RNG around the country, a 234 percent increase over the past six years.
The report noted that in previous years, tax incentives such as the Alternative Fuel Tax Credit and Low Carbon Fuel Standards lowered the total cost of ownership of natural gas vehicles, but the evolving tax structure introduces new variables. The AFTC expired at the end of 2024, and while the new 45Z tax credit created by the Inflation Reduction Act aims to replace it, details are still emerging. Plus, LCFS is currently only available in California, Washington, Oregon and New Mexico.
“There’s still some uncertainty with 45Z and just the broader IRA policy,” Todd Ellis, general manager of sales, said during last week’s media briefing. “So, we are all waiting [for] clarity around IRA and the respective programs, and once we have that, then I think [the] industry will adjust and adapt to what those look like, but it certainly could be a driver toward broader adoption, if we get the policy right. …. I think we’re all watching closely and working across [the] industry to ensure that we are we are progressing this at the at the right pace.”
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Meanwhile, battery electric vehicles, despite policy rollbacks or funding pauses, continue to show market development and growth. School bus registrations rose 47 percent to 1,436 units, the report states. And despite a current lack of federal support, report authors highlight state sources and other policies to fund EVs.
In terms of the EPA Clean School Bus Program, the report notes that future funding is at a higher risk of being cut, as opposed to the CSBP rebates that have already been announced. The EPA announced last week that funds are flowing again for the 2023 rebate program and awardees are seeing money hit their bank accounts. But there was still no word on when or if the latest 2024 rebate would be awarded this spring.
The Sustainable Fleet report, based on a survey of over 200 commercial truck and bus fleets, states that federal and state funding programs continue to incentivize electric school bus deployments across the country. The authors did discuss a temporary backlog for school buses that could be on the horizon due to a limited number of manufacturers and constraints on production capacity.
“The surge in funding and subsequent orders may soon test the capacity of manufacturers, whose order books are full, potentially leading to temporary production bottlenecks,” the report states, citing four school bus manufacturers that produce the full Type A through Type D school buses, including Lion Electric that is currently being auctioned off after defaulting on multiple loans last fall that were keeping the company afloat. “Manufacturers maintain full production lines, and one manufacturer told TRC that capacity constraints could emerge once all orders are placed. This same OEM currently sees BEV lead times equivalent to their ICE lead times of six months or less, a milestone in production that could help ease any backlog. Adding further potential for an upcoming surge, many EPA grant recipients have requested and received project extensions, extending their completion deadlines from two years to three years. For instance, Blue Bird reported that 1,000 electric buses were either sold or are included in its firm order backlog during its fiscal 2025 first-quarter earnings call.”
The report adds that the commercial vehicle industry may soon face a “perfect storm” of heightened demand and containment as order delays and EPA regulatory extensions are pushing the bulk of deliveries into 2025 and 2026. The report also cited the challenge of higher electric school bus purchase costs compared to diesel models.
Where electricity in school buses is excelling is with vehicle-to-grid technology. The report states that school buses are an early adopter of V2G technology as many buses come equipped with bi-directional charging as standard. STN reported last year on the Oakland Unified School District in California that replaced its entire fleet of 74 school buses with EVs, and bi-directional charging. However, the V2G movement is slow to adopt in the pupil transportation industry, with many stating it’s not as beneficial as it is being marketed.
The report only made passing references to propane. TRC noted to School Transportation News that a supplemental report on propane would be available this summer.
The ACT EXPO continues to run through Thursday at the Anaheim Convention Center. STN is a media sponsor of ACT Expo.
