HomeSpecial ReportsACT EXPO Opens with Report on Accelerated Commercial Clean Vehicle Adoption

ACT EXPO Opens with Report on Accelerated Commercial Clean Vehicle Adoption

LONG BEACH, Calif. — Mary Aufdemberg, the general manager of product strategy and market development for Daimler Truck North America, commented at the start of the Advanced Clean Transportation (ACT) Expo that there is no “easy button” to reaching net-zero emissions from commercial trucks and buses.

Her sentiments posed during an opening general Monday afternoon in front of a standing-room-only audience at the Long Beach Convention Center, summarized the 2022 State of Sustainable Fleets Report released by event producer Gladstein, Neandross & Associates earlier in the day. The paper indicates strong momentum in the adoption of zero- and low-emissions commercial vehicles among the 250 U.S.-based fleets surveyed that are using biofuel, CNG, battery-electric, fuel-cell electric, or propane vehicles. Eighty-five percent of the companies said they will increase their use of clean fleet technologies over the next five years. Yet there is no clear-cut winner in terms of the fuel or energy to achieve eventual net-zero emissions.

“Every year the report comes out, we’re hoping it will tell us what to do: Here is the fuel of the future, the energy of the future,” noted Aufdemberg, who managed the Center for Education and Marketing at Thomas Built Buses from 2008-2012. “It’s clear we’re not to an easy button yet. And I think that’s the complexity of the commercial transportation industry that we’re in. We all have so many different use cases.”

And with those use cases comes the reality that any fuel or energy chosen to embark on the road to net-zero emissions must be paved with the lowest total cost of ownership, or TCO. Aufdemberg as well as her fellow panelists Andrew Cullen, senior vice president of fuels and facility services for Penske Transportation Solutions, and Carlos Maurer, executive vice president of sectors and decarbonization at Shell, mentioned TCO multiple times throughout their discussion.

Maurer pointed out that the real struggle to achieve net-zero emissions is getting there. The reality is, he added, it will require a transition that relies on various fuels or energy that make the most sense to different sizes of fleets that operate in different regions. Requiring multiple infrastructures will result, which can further complicate operations.

Said Penske’s Cullen, “The focus right now is to find a solution for customers that is reliable and efficient.”

The sustainable fleets report was sponsored by Cummins, Inc., Daimler Trucks, Penske and Shell. It concluded that while reaching efficiency is essential to right-sizing fleets to adopt near-zero or zero-emissions vehicles, it’s the first step. It needs to pair with more aggressive strategies such as adopting a portfolio of fuels.

The report also found that biofuels will play an initial role this decade, with zero-emission vehicles (ZEVs) becoming increasingly critical in the 2030s. Nearly 100 percent of truck and bus sales in 2050 are forecast to be ZEVs.

A key to increased adoption of near- and zero-emission transportation across the public and private sectors, including accompanying fueling and charging infrastructure, is record-setting government funding and legislative support at both the state and federal levels, the 2022 report confirms.

Maurer added that partnerships are crucial to adopting clean fuel and energy. When entering agreements, he advised that companies should understand what partners and their customers need to win. “It’s all about risk-balancing,” he shared.

Meanwhile, much optimism reigns, as indicated by the record turnout of 8,500 attendees at ACT Expo this week. Cullen commented that the sustainability report reflects growing engagement, enthusiasm and conviction of the clean transportation market. “That is really, really refreshing,” he added. “We see it all the time when we talk to customers and to the OEMs and our fuel partners. It feels like the momentum is growing.”

Despite barriers to that growth, such as continuing supply chain shortages and a 50-percent price market decrease for low carbon fuel credits, Aufdemberg noted the “tremendous” number of clean fuel and energy vehicles in production compared to a year ago. “For an industry that tends to really take its time to invent and come out with new technology and then to do it before we have the infrastructure in place, serves to really show that we can see this as a pathway to the future for us in terms of zero emissions,” she observed.

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Erik Neandross, chief executive officer of event producer Gladstein, Neandross & Associates, shared at the outset of Monday’s opening session that the sustainability report cites more than $20 billion will be available annually over the coming several years to fund low- and zero-emissions projects via some 230 state and federal programs, the largest coming from the $1.2 trillion Investing in Infrastructure and Jobs Act signed into law last fall by President Joe Biden. The Clean School Bus Program alone accounts for $5 billion over fiscal years 2022 through 2026. The U.S. Environmental Protection Agency was expected to announce the official opening of its 2022 rebate program this week.

The report also noted that for the entire truck sector, CNG and propane have reached mass commercialization status despite no longer receiving incentive funding, which expired at the end of last year. The report calls that development, “a significant milestone for the commercial alternative fuel vehicle sector.” The reason is that those fuels, while only propane appears to remain a viable option for school bus operators after CNG production has fallen significantly over the past couple of manufacturing cycles, demonstrate positive TCO that is needed. Across the rest of the truck segment, however, CNG is strong.

Additionally, the report found that renewable propane is gaining in popularity, especially in California because the fuel is a credit generator in the state’s Low Carbon Fuel Stanard program, while regular propane is a deficit-generating fuel that imposes a cost penalty.

Diesel, meanwhile, will continue to play an important role as a bridge fuel, despite current market volatility. Diesel fuel prices are at an all-time high, further improving economics for alternatives. National average prices at the pump were 19% higher in 2021 than in 2020.

Further complicating the future of diesel is EPA’s proposed Clean Trucks Plan, which is derived from California’s Low NOx Omnibus rule passed late last year to require trucks to comply with progressive emissions reduction standards beginning with model-year 2024. A new federal rule could significantly increase the costs of manufacturing diesel chassis, which could result in price hikes for customers or some OEMs choosing to no longer support the fuel.

In the short term, renewable diesel growth will remain strong, driven in part by the Renewable Fuel Standard and state clean fuel standards, which makes RD more price competitive with regular diesel despite still costing about $1 more per gallon. Production capacity rose to 800 million gallons last year from 600 million gallons in 2020. Adoption of RD is also highest among government fleets.

The report also provided advice for commercial fleets that have yet to implement sustainability programs, which exist at 92 percent of S&P companies and 70 percent of companies listed on the Russell 2000, the benchmark for smaller U.S. stocks. Fleets can start by calculating the total annual GHG of their vehicles to establish a baseline and then evaluate GHG emissions reductions from efficiency programs and use of renewable and clean fuels.

Next is performing a comprehensive review of the fleet, from location to location, comparing results to emerging near-zero, zero emissions and renewable fuel alternatives, and forecast their development and costs to set net-zero targets (eliminating all GHG emissions resulting from fleet operations by a time-bound goal) or science-based targets (standards-based, setting a target that is aligned with emissions reductions needed to meet the goals of the Paris Agreement). GHG emissions should be reduced by 80 to 100 percent by 2050.

Editor’s note: School Transportation News is an official media sponsor of ACT Expo, which runs through May 12. The 2023 conference is scheduled for May 1-4. The article was updated to provide the final attendee count provided by Gladstein, Neandross & Associates.

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