Decarbonize Owned and Leased Fleet Vehicles

Transport accounts for almost a quarter of global GHG emissions, and road vehicles are responsible for the majority of these emissions. Significant action is being taken to decarbonize vehicle fleets across the public and private sector. Over 120 of the world’s leading companies have committed to transitioning their light vehicles to electric vehicles by 2030,¹ and the United States Environmental Protection Agency continues to propose more stringent vehicle emission standards.²   

Companies like yours are recognizing the importance of zero-emissions vehicles in achieving their organization-wide emissions targets. Decarbonizing fleets is a long-term process, but one that will have multiple benefits for your company beyond emissions. The transition to zero-emissions vehicles will reduce your costs in the long term, your exposure to fuel price fluctuations, and air and noise pollution in your communities. By collaborating with others and using your political voice, your company can leverage your decarbonization journey and create action at scale in the transport sector.  

Your Fleet Decarbonization Journey 

Significant progress is being made in electrifying all road vehicle types. Prices are declining and model availability is increasing for light passenger and commercial vehicles. The technical and commercial viability of electric heavy vehicles is also improving. Promising sustainable fuel alternatives have begun to emerge for certain vehicle types and journeys that cannot be easily electrified, but have not yet reached commercial viability.  

Regardless of the nature of your fleet, your company should commit to a full transition to zero-emissions vehicles. Targets should be ambitious and have specific timelines, while considering your fleet’s unique attributes, such as vehicle types, duty cycles, and length of turnover cycles. Additionally, companies should prioritize community health and address the near-term impacts your operations have on communities that have been historically overburdened with diesel pollution.  

Decarbonizing is a long-term process, but it can begin now. Here are the key phases for a company’s fleet decarbonization journey:   

1. Review the landscape and gather your team. Learn from other companies’ case studies, your own company’s sustainability goals and your electric utility. Work with an internal project management team to help get the process rolling forward.   
2. Identify what is possible now based on today’s zero-emissions vehicles and charging/refueling technologies, your current routes and duty cycles, cost estimates and timelines. The goal is to identify what’s possible and set the priorities that determine which vehicles and/or routes you electrify first.  
3. Create a plan for near term deployment. Arm yourself with data and a strong business case. Work to earn senior leadership’s approval to seek publicly available funding (such as grants) and procure vehicles and charging infrastructure. Your company’s procurement team will play an important role in this phase.  
4. Deploy your pilot programs in the field. At this point, drivers are up to date on the changes and pilot results are being tracked and reported. With this experience under your belt, your team can think longer-term: how will you get from where you are to a 100% zero-emissions fleet?  
5. Expand adoption. Once you get to this final step, the journey isn’t over. It’s time to expand your company’s adoption of zero-emissions technologies. For that, you circle back to Phase 2, but now carrying first-hand knowledge and experience into a new feasibility analysis.³ 

Importantly, electrification and fuel switching aren’t the only solutions for decarbonizing your vehicle fleets. There are many other things you can do now to reduce your company’s transport emissions, including:

• Optimizing your travel miles: For passenger vehicles, this might mean introducing sustainable travel policies that disincentivize business travel in company cars, and incentivize lower emission options like public transport or video-conferencing. For freight vehicles, this might mean increasing the load factor of your trips to improve efficiency, and ongoing route optimization. 
• Fuel optimization: Actions like good driving habits, preventative vehicle maintenance, and improvements to vehicle aerodynamics can reduce fuel requirements, which will lower costs and reduce emissions. 

Collaborating and Signaling to Achieve Action at Scale 

Accelerating the transition to zero emissions vehicles requires action by all stakeholders. As a company you can influence many leverage points through collaborating with others and signaling your demand for zero-emissions vehicles. For example, if you lease vehicles, working with your suppliers to provide zero-emissions vehicles will allow your company to reach its targets as well as increasing the likelihood that your supplier will provide zero-emissions vehicles to other customers.  

Similarly, car and battery manufacturers are increasing production and model availability, but this can be furthered though clearer demand signals from the market. This also applies to the roll out of charging infrastructure—users want increased infrastructure to reduce range anxiety, but infrastructure providers want assurance that their product will be sufficiently used.  

By sharing your company’s targets, plans and learnings with others, and collaborating within trade associations and with other players in your value chain, you can help build the production scale necessary to continue driving down the costs and increasing the supply of vehicles and other equipment.  

Policy Support and Advocacy 

Government support is available to assist your company in decarbonizing its vehicles. The Inflation Reduction Act, for example, has a Clean Heavy-Duty Vehicle Program, as well as tax credit initiatives for Qualified Commercial Clean Vehicles and Alternative Fuel Vehicle Refueling infrastructure (which includes electricity charging). Many state and local governments also provide clean vehicle grants and incentives.¹  

While public programs supporting zero-emissions transport exist, further policies are needed to decarbonize vehicle fleets at the rate required to mitigate the worst impacts of climate change. A core pillar of your company’s sustainable transport program should be policy advocacy. Using your voice is the most powerful tool your company has in addressing climate change. For example, your company and your trade associations can use your political influence to advocate for: 

• the phase out of fossil fuel subsidies 
• further funding for EV charging infrastructure  
• the development of national taxonomies and standards for fuel alternatives 
• the decarbonization of the power grid 
• research and development funding for zero-emissions heavy transport.⁴ 

Footnotes:

1. EV100 
2. Proposed Rule: Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles 
3. IRA Fleet Electrification Activation Guide  
4. Pathway to Net Zero: A Guide for Business