Green Fleet Initiatives Justin Zohn, Senior Consultant Havill & Company, Inc. Green Technology Market Drivers • Protect the Environment – Transportation is the fastest-growing source of U.S. GHGs, accounting for 47% of the net increase in total U.S. emissions since 1990. • Reduce Oil Imports – More than half of the oil we use is imported. • Conserve Resources – If current rates of oil consumption were to continue, the world’s remaining resources of conventional oil would be depleted in 40 years. • Save Money – A fleet of cars and light trucks that reach 40 mpg will save consumers $2,500-$5,300 on fuel over the life of the vehicle. 2 The Obama Biden comprehensive New Energy for America Plan • Create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future • Within 10 years save more oil than we currently import from the Middle East and Venezuela combined • Reduce greenhouse gas emissions 80% by 2050 • Make our Cars, Trucks and SUV’s Fuel Efficient 3 Federal Laws and Incentives • U.S. Internal Revenue Service (IRS) – Clean Fuel Tax Deduction • Federal Tax code provides a deduction to compensate for the cost of the vehicle components that enable it to use clean fuels and the costs of storing and dispensing the fuel. – Plug-in Drive Vehicle Credit • Federal Tax code provides a deduction to compensate for the purchase of a plug-in electric vehicle. – Conversion Kits • Federal tax code provides a credit equal to 10% of the cost of converting a vehicle to a qualified plug-in electric vehicle. 4 • U.S. Department of Energy (DOE) – Clean Cities Act • Coordinates the voluntary efforts of more than 80 coalitions of locally based government and industry stakeholders that promote alternative fuels and vehicles, fuel blends, fuel economy, hybrid vehicles, and idle reduction. – State Energy Program • Provides funding to individual states for the implementation of their comprehensive State Energy Plans. • Rainbows Time Fill CNG fueling facility. Includes public retail fast fill station ($150K). • Biodiesel infrastructure investment ($150K) in Salt Lake Valley Area for five commercial fleet biodiesel stations. 5 • U.S. Department of Transportation (DOT) – Corporate Average Fuel Economy (CAFE) • The law sets a target of 35 miles per gallon for the combined fleet of cars and light trucks by model year 2020. 6 • U.S. Environmental Protection Agency (EPA) – Smartway Transportation • A voluntary partnership between the EPA and the ground freight industry designed to reduce greenhouse gases and air pollution through increased energy efficiency. – Proposed: American Clean Energy and Security Act (ACES) • The program sets an upper limit on nationwide emissions and then issues allowances or credits, which are rights to emit a particular amount of greenhouse pollutants. – This bill has been passed by the House but is currently on hold in the Senate with no timetable for a vote. 7 Conventional vs. Alternative Fuels U.S. Commercial Fleet Industry Fuel Consumption (Millions of Gallons) 865 (2%) Gasoline 24,507 (49%) 24,281 (49%) 8 Diesel Alternative Fuels Alternative Fuel Consumption Alternative Fuel Consumption Biodiesel 1,000,000 900,000 Methanol 800,000 Liquefied Petroleum Gas (LPG) Liquefied Natural Gas (LNG) 700,000 600,000 500,000 Hydrogen 400,000 300,000 Ethanol, 85% (E85) 200,000 Electricity 100,000 0 2003 2004 2005 2006 9 2007 Compressed Natural Gas (CNG) Electric Vehicles • Pros: Potential for zero emissions, sizeable savings on fuel and maintenance costs • Cons: Limited range, significant loss in horsepower, long charge times, high initial cost • Suppliers: GM, Nissan, Ford, Chrysler, Freightliner, Smith Electric Vehicles • Implementers: PepsiCo, Staples, AT&T, Coca Cola, Ambius, Edible Arrangements • US Inventory: As of 2007 there were an estimated 55,730 electric vehicles in use 10 Hybrid Electric Vehicles • Pros: Improved fuel economy, Reduced CO2 emissions • Cons: Battery cost, initial high cost of vehicle • Suppliers: Ford, Toyota, Honda, GM, Hyundai • Implementers: FedEx, UPS, Staples, WalMart, New York City, Seattle, Washington D.C. • US Inventory: As of 2007 there were an estimated 333,530 hybrid electric vehicles 11 Hybrid Hydraulic Vehicles • Pros: Requires less maintenance, reduced fuel cost, reduced emissions, well suited for large vehicles with start/stop drive patterns • Cons: High initial vehicle cost • Suppliers: International w/Eaton drivetrains; Freightliner w/Parker drive systems • Implementers: Duke Energy, PG&E, UPS • US Inventory: The number of vehicles has grown from 200 in 2006 to an expected 5,000 in 2010 12 Ethanol (E85) • Pros: Low emissions, renewable energy source, lowers maintenance costs • Cons: Insufficient but growing infrastructure, lower mpg than gasoline • Suppliers: Chrysler, Ford, GM, Nissan, Toyota, Isuzu, Mazda, Mercedes-Benz • Implementers: State Farm Insurance, GE Healthcare, Xerox, Enterprise • US Inventory: There are an estimated 8 million flex fuel (E85) vehicles 13 Biodiesel • Pros: No engine modification, low emissions, comparable engine performance, extends engine life, high flash point safer to transport • Cons: Not suitable in low temperatures, limited supply, high level blends can degrade components, shelf-life may be relatively short before sediment and microbial growth degrades quality, • Implementers: Eli Lilly, University of Michigan, Archer Daniels Midland 14 Hydrogen Fuel Cell Vehicles • Pros: Zero emissions, fuel economy, fuel is produced domestically from several sources • Cons: High initial vehicle cost, fuel is expensive, limited fueling infrastructure • Suppliers: Nissan, Honda, Chevrolet, Mercedes-Benz • Implementers: Sacramento Coca Cola Bottling, private test fleets limited lease basis • US Inventory: As of 2007, an estimated 220 hydrogen vehicles were in use 15 Natural Gas Vehicles • Pros: Very low emissions, performance booster in cold weather, currently natural gas cheaper than diesel • Cons: High initial vehicle cost, insufficient but growing infrastructure, miles-per-fill-up is half that of gasoline, public vs. depot filling options • Suppliers: Honda only OEM-built CNG-powered passenger car in U.S., Cummins Westport heavy-truck engines, retrofit systems available for light trucks & vans • Implementers: UPS, Los Angeles and Long Beach ports, Allied Waste, Consolidated Edison, Roche • US Inventory: Currently there are 120,000 natural gas vehicles in use 16 Propane Vehicles • Pros: Lower emissions, lower maintenance cost, driving performance similar to conventional fuels • Cons: Range slightly less, limited storage time, expensive storage systems, limited infrastructure • Suppliers: Roush conversion vehicles, CleanFUEL USA conversion engine systems • Implementers: UPS, Schwan’s, Delta Airlines, Fed Ex, Toshiba • US Inventory: Currently there are 158,250 propane vehicles in use 17 Cost Per Gasoline Gallon Equivalent (GGE) Gasoline Cost per GGE $2.61 Diesel $2.45 CNG Propane $2.43 $4.16 Ethanol $3.18 B100 Electric $3.06 • GGE is the amount of alternative fuel it takes to equal the energy content (measured in BTUs) of one liquid gallon of gasoline. • This cost does not account for variances in vehicle fuel efficiency. *GGE data supplied by Alternative Fuels Data Center 18 $0.99 Fueling Infrastructure • The adoption of alternative fuels is going to be based largely on the available filling station infrastructure – Dispersed fleets that must rely on “retail fuel outlets” are significantly limited in the choice of fuel. – Domiciled fleets have more options if they choose to equip their onsite facility with a fueling station. US Filling Stations by Fuel Type Gasoline 161,768 Biodiesel 683 Electric 521 Ethanol 2,113 19 CNG LPG 863 2,411 Hydrogen 57 Other Green Technologies • Telematics: GPS technology optimizes logistics and in turn boosts productivity and reduces fuel and maintenance expenses. Additional benefits include cost tracking, reduced speeding and decreased accident occurrence. – Currently, an estimated 3.6 million devices are used to monitor fleet vehicle, trailers equipment & mobile workers per C.J. Driscoll & Assoc. 2009 study • Motor Pools: Companies such as Zipcar and Car2go provide public and private motor pools that reduces capital investment and cost of ownership burden. – Zipcar also markets their vehicle resource scheduling and tracking equipment to government and private fleets allegedly saving those entities hundreds of thousands of dollars annually. 20 Fleet Administrator Planning Guide • Calculate Green House Gas (GHG) emissions from fleet vehicles. • Evaluate best practices – Domiciled Fleets – Dispersed Fleets • Develop a GHG emissions reduction plan – Calculate GHG emissions under best practices scenario – Set annual GHG emissions goals based on vehicle turnover rates • Annually report emission reductions against plan 21 More Information For more information about Havill’s upcoming Green Fleet Research visit: www.LeanGreenFleet.com 22