TRC Companies, the leading clean technology consulting firm formerly known as GNA, unveiled its latest State of Sustainable Fleets Market Brief at the Advanced Clean Transportation Expo it is hosting this week in Las Vegas, NV. Now in its fifth year, the 2024 Market Brief sheds light on a U.S. commercial vehicle industry in transition, facing a slew of new emissions regulations adopted in the past two years. Combined with the growing pains of new technology, it spotlights a period of peak complexity for fleet operators.

For the Market Brief, Penske Transportation Solutions, Volvo Trucks North America, and Chevron were title sponsors, and Dana, Exelon, and S&P Global Mobility were supporting sponsors.

“The last two years of decisive new emissions regulations and the complexity that come with adopting any new technology, let alone multiple new clean technologies, compounds confusion for fleets,” said Nate Springer, Vice President of Market Development, TRC Companies. “It is exciting to see the numerous new partnerships, investments, and innovations that industry and government are forging to put sustainable solutions into the hands of fleets today while laying the groundwork for tomorrow’s ever-greater adoption of clean technologies.”

Last year saw a record flow of $32 billion in state and federal funds available to fleets and supplies of renewable diesel and renewable natural gas reached new highs to deliver solutions for fleets today. A vanguard of new utility-fleet partnerships, depot and leasing business models and technologies to use existing natural gas supplies revealed an oncoming host of innovations to solve the charging challenge.

“Fleets today are faced with a myriad of challenges in their continual pursuit of reducing the environmental impact of their operations,” said Drew Cullen, Penske Senior Vice President of Fuels and Facility Services. “The complexity of options, investment requirements, and the promise of continued technology improvements only adds to fleet planning uncertainty.”

As zero-emissions regulations take hold in 11 states and a new emissions standard deadline for model year 2027 looms nationally, fleets are struggling to comply with a confusing new regulatory landscape. For fleets trying to deploy zero-emissions technologies to meet some of these or their own goals, charging infrastructure gaps, consistently high battery and production costs, and power capacity constraints resulted in project delays in 2023, all of which are expected to persist for several years.

“At Volvo Trucks, we are committed to providing total transportation solutions with an electromobility ecosystem of support for our customers who choose the VNR Electric, the class-leading zero-emissions truck in the market,” said Keith Brandis, Vice President, of Partnerships and System Solutions, Volvo Group North America, but his firm is taking a multi-pronged approach. “We are also working on developing future technologies such as fuel-cell electric vehicles and improving the efficiency of the internal combustion engine running on renewable diesel and hydrogen.”

Energy companies like Chevron are hoping to ease the energy transition.

“Our goal is to reduce carbon across the future energy economy,” said Andy Walz, President of Chevron Americas Products. “To do that, we need to keep innovating and looking for viable, lower-cost solutions. Economics matter and we need many different solutions, evaluated on their lifecycle carbon intensity. Policy support should drive toward reducing carbon intensity, following a technology agnostic approach.”

This year’s brief offers insights on developments in the markets for renewable fuels and electricity paired with diesel, near-zero, and zero-emissions vehicles. Among fleets using efficiency technology and practices in the annual survey, 63% expect diminishing returns on new investments of this type going forward.

On the more traditional side of energy, renewable diesel consumption increased by 68% in 2023 compared to 2022, with most consumption occurring where favorable carbon credit markets ensured price parity with diesel.

Fleets using compressed natural gas (CNG) met 70% of their fueling needs with renewable natural gas (RNG) on average in the survey. RNG producers opened more than 150 new facilities while maintaining a queue of at least 300 projects in 2023. The carbon intensity of RNG on California’s Low Carbon Fuel Standard market improved by 21% between 2022 and the first three quarters of 2023.

Production of lighter and stronger 15-L natural gas engines beginning in 2024 is expected to open opportunities for many more fleets and lead to significant growth in natural gas vehicle sales. Natural-gas-fueled linear generators began operations to charge battery-electric Class 8 trucks.

Battery electric vehicles (BEVs) accounted for only 1-2% of all fleet vehicles of early adopters in the annual survey though 90% of users of this technology expect their use to increase. However, more than 26,000 buses, trucks, and vans were delivered in 2023, doubling the number of BEV deliveries made in 2022. Commercial cargo vans and pickup trucks made up 90% of all BEV deliveries in 2023, 95% of which were dominated by two manufacturers—Ford and Rivian. Multiple fleet-dedicated charging depots opened or were in construction in 2023, while numerous providers of leasing and “as a service” vehicle and charging services were announced.

Supporting longer-term energy infrastructure, the U.S. DOE’s historic allocation of $7 billion will fund seven proposed hydrogen fuel production and distribution hubs spanning 16 states. However, there are significant challenges with the source, as the average retail price of hydrogen in 2023 nearly doubled from mid-2022 levels to as much as $36/kg in California.