National Renewable Energy Laboratory 

Innovation for Our Energy Future 

A national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

NREL is operated by Midwest Research Institute ● Battelle Contract No. DE-AC36-99-GO10337 

Transitioning to a Hydrogen 

Future: Learning from the 

Alternative Fuels Experience 

M. Melendez 

Technical Report 

NREL/TP-540-39423 

February 2006 
Transitioning to a Hydrogen 

Future: Learning from the 

Alternative Fuels Experience 

M. Melendez 

Prepared under Task No. HS06.1002 

Technical Report 

NREL/TP-540-39423 

February 2006 

National Renewable Energy Laboratory 

1617 Cole Boulevard, Golden, Colorado 80401-3393 

303-275-3000 • www.nrel.gov 

Operated for the U.S. Department of Energy 

Office of Energy Efficiency and Renewable Energy 

by Midwest Research Institute • Battelle 

Contract No. DE-AC36-99-GO10337
NOTICE

This report was prepared as an account of work sponsored by an agency of the United States government. 

Neither the United States government nor any agency thereof, nor any of their employees, makes any 

warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or 

usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not 

infringe privately owned rights. Reference herein to any specific commercial product, process, or service by 

trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, 

recommendation, or favoring by the United States government or any agency thereof. The views and 

opinions of authors expressed herein do not necessarily state or reflect those of the United States 

government or any agency thereof. 

Available electronically at http://www.osti.gov/bridge

Available for a processing fee to U.S. Department of Energy 

and its contractors, in paper, from: 

U.S. Department of Energy 

Office of Scientific and Technical Information 

P.O. Box 62 

Oak Ridge, TN 37831-0062 

phone: 865.576.8401 

fax: 865.576.5728 

email: mailto:reports@adonis.osti.gov

Available for sale to the public, in paper, from: 

U.S. Department of Commerce 

National Technical Information Service 

5285 Port Royal Road 

Springfield, VA 22161 

phone: 800.553.6847 

fax: 703.605.6900 

email: orders@ntis.fedworld.gov

online ordering: http://www.ntis.gov/ordering.htm

Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste
Table of Contents 

Background................................................................................................................................................. 1 

Project Description and Goals .................................................................................................................... 1 

Transportation Transition............................................................................................................................ 2 

Project Phases............................................................................................................................................. 3 

Literature Review.................................................................................................................................... 3 

Collecting Expert Feedback.................................................................................................................... 5 

Expert Feedback and Strategies.............................................................................................................. 7 

Issues and Questions from the data......................................................................................................... 9 

Major Messages from the Analysis........................................................................................................... 10 

Conclusions and Recommendations......................................................................................................... 11 

Acknowledgements................................................................................................................................... 13 

Acronyms.................................................................................................................................................. 14 

Appendices................................................................................................................................................ 15 

Appendix A: AFV Lessons Learned Literature Summary ................................................................... 16 

Appendix B: Barriers Questionnaire..................................................................................................... 18 

Appendix C: Strategies Questionnaire.................................................................................................. 19 

Appendix D: Strategies Most Important for Each Barrier.................................................................... 20 

iii
Background 

In 2003, President George W. Bush launched the Hydrogen Fuel Initiative, which envisions a future 

hydrogen economy for the United States. A hydrogen economy would increase U.S. energy security, 

environmental quality, energy efficiency, and economic competitiveness. Transitioning to a hydrogen 

economy, however, presents numerous technological, institutional, and economic barriers. These 

barriers apply not only to the development of fuel cell vehicles and stationary fuel cells but to the 

development of a hydrogen fueling infrastructure. The President asked the U.S. Department of Energy 

(DOE) to lead the efforts to overcome these barriers. This effort is managed through the Office of 

Energy Efficiency and Renewable Energy (EERE) and spearheaded by the Hydrogen Fuel Cells and 

Infrastructure Technologies Program (HFC&IT) 

Since 1977, the National Renewable Energy Laboratory (NREL) has worked closely with DOE to 

develop and evaluate advanced transportation technologies, such as alternative fuels and hybrid electric 

vehicles. This work has been done in partnership with EERE’s FreedomCAR and Vehicle Technologies 

(FCVT) Program. NREL’s work with alternative fuels programs, such as Clean Cities, the Advanced 

Vehicle Testing Activity, and others has resulted in extensive knowledge in and experience with the 

implementation of alternative fuels. Because hydrogen vehicles face many of the same implementation 

challenges as other alternative fuel vehicles (AFVs), the lessons learned in this arena can guide the 

transition to hydrogen. 

This project was funded by the Systems Integration Program at NREL. It was designed to identify key 

concepts and lessons learned through the evaluation and deployment of alternative fuels. It marries the 

experience of FCVT programs with the technologies of the HFC&IT programs to suggest the most and 

least successful implementation strategies to pursue in the transition to a hydrogen-based transportation 

system. 

Project Description and Goals 

The challenges faced by alternative fuels during the last 20 years have much in common with those that 

face hydrogen (i.e., building markets simultaneously for new vehicle technologies, new fuels, and new 

infrastructure to support them both). The United States set goals in the 1980s and 1990s to derive a 

substantial portion of its fuel for transportation from non-petroleum alternative fuels by the early 2000s 

(10% in 2000, 30% in 2010). Although progress has been made through government and private efforts, 

these goals have not been met for a variety of reasons. To increase the chances for a timely and 

successful transition to hydrogen, the experiences of the alternative fuels industry must be understood 

and used to shape hydrogen transition strategies. 

The National Academy of Science (NAS) once suggested that “DOE might have its greatest impact by 

leading the private economy toward transition strategies rather than to ultimate visions of an energy 

infrastructure markedly different from the one now in place.1” The NRC also encouraged DOE to build 

upon past experience with alternative fuel technologies and their introduction into the marketplace. 

 

1

 “The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs,” pages 2-10, 2004, National Academies Press 

1
A wealth of practical knowledge concerning alternative fuel technologies, products, national policies, 

and market introduction exists within industry, regulated fleets, and voluntary programs. Issues relating 

to consumer choice, capital investment, business decision making, manufacturing, and infrastructure 

construction will need to be understood in the alternative fuels context if the hydrogen transition is to 

occur efficiently. 

The overall objective of this project is to assess relevant knowledge within the alternative fuels 

community and recommend transitional strategies and tactics that will further the hydrogen transition in 

the transportation sector and help avoid stranded assets in the alternative fuels industry. 

Transportation Transition 

Transitioning personal transportation in the United States is a daunting challenge. The country has been 

firmly entrenched in petroleum-based, internal-combustion technology for nearly 100 years, 

encompassing not only the vehicle systems and refueling infrastructure but in vehicle maintenance and 

parts, fuel production and distribution, and in government policies. Because of this, movement away 

from a petroleum-based system to one of alternative fuels (including hydrogen) requires many changes 

or decisions to occur in parallel. For instance, not only would a vehicle manufacturer need to offer 

AFVs for sale but the fuel needs to be produced and distributed to a new refueling location to support 

the vehicles. In addition, laws and tax issues need to be worked out to allow for the use of such 

alternatives. The greatest challenge of the transition is to get all the critical elements spatially and 

temporally aligned. 

Table 1 shows the broad range of critical decision makers involved in transportation transition. In some 

cases, one person may fulfill two decision-making roles (such as when drivers make their own purchase 

decision versus when central fleet purchasers control the vehicles others operate). Table 1 also shows 

whether these decision makers are required to make behavioral changes to allow for the transition to 

various types of alternative transportation fuels. 

Table 1. Critical Decision Makers Involved in the Hydrogen Transition 

Alternative Transportation Technology 

Decision Maker 

Hybrid Biodiesel 

Ethanol 

Blends E85 CNG LPG H2 

Auto Manufacturer X X X X X 

Auto Purchaser X X X X X 

Auto Driver X X X 

Auto Regulator X X X X X 

Fuel Producer X X X X 

Fuel Deliverer X X X X X 

Fuel Station Operator X X X X 

Fuel Regulator X X X X X X 

Fuel Purchaser X X X X X X 

Finally, Table 1 illustrates the complexity of coordination of each of these decision makers—so many 

people are required to make various transitions occur. For example, hybrid vehicle deployment requires 

that an auto manufacturer produce a hybrid vehicle, that a regulator certifies that vehicle for safety and 

2
emissions, and that a consumer chooses a new vehicle technology. With E85 vehicles, not only must the 

manufacturer, regulator and consumer select the new technology, but a fuel producer and distributor 

must decide to participate in the emerging market, fuel regulators must establish codes and standards for 

the new fuel, stations must elect to offer the fuel for sale, and the person purchasing the fuel must elect 

to refuel their vehicle with E85. Hydrogen has the challenges of coordination of these stakeholders, plus 

potential issues with driving differences and utility of the hydrogen vehicle that affect the driver. With 

each additional decision maker the coordination to make the transition becomes more challenging. 

Project Phases 

The first step in understanding lessons learned in the deployment of alternative fuels and their 

application in the hydrogen transition was a review of topical literature (Phase I). Literature results were 

used as the basis for collecting input from experts involved in the deployment of alternative fuel and 

advanced technology vehicles (Phase II). These experts would ideally include technology developers, 

auto makers, alternative fuel providers, technology advocates, fleet customers, non-fleet customers, and 

policy makers. Because of limited resources and timing, this analysis focuses on two groups of 

stakeholders: in-house NREL engineers and scientists with expertise in the development and deployment 

of advanced technology vehicles (technology developers) and Clean Cities coordinators with expertise 

in building support for advanced vehicle technologies at the local level (technology advocates). 

Phase I—Literature Review 

A literature search for topics related to lessons learned in alternative fuels deployment was conducted. 

Nearly 40 relevant papers from an array of organizations—such as universities, government agencies, 

and environmental groups—were reviewed (Table 2). 

Literature Highlights 

• Universities—Past 15 years addressed 

technology but not market factors 

• U.S. Government/National Laboratories—

Anchor fleets led to most stable 

infrastructure; fleets alone are not enough 

• Non-Governmental Organizations (NGOs)—

Infrastructure incentives are critical 

• Private Sector—Need public support 

• Other Government—Government should 

share risk/stations should be located near 

fleets and along interstates

The majority of papers were written by authors well 

known in the alternative fuels industry. Their 

analyses were based upon up to 15 years of 

observations in the alternative fuels transition. Most 

papers relied on this experience to draw conclusions 

about the effectiveness of various strategies utilized 

in AFV deployment activities. To most effectively 

summarize literature results for this study, a 

compilation of the each paper’s main conclusions 

were documented and weighted based upon the 

number of references in the literature. The complete 

breakdown of paper content is shown in Table 3. 

3
Table 2. Summary of Organizations Represented in Literature Review

Organization Number 

Universities 5 

U.S. Government/National Laboratories 12 

NGOs 9 

Private Sector 4 

Other Government 3 

Table 3. Summary of Paper Perspectives/Content in Literature Review 

Source Number 

Data Analysis 2 

Personal Insights 25 

Modeling Results Analysis 4 

Human Factors 2 

Most of the literature reviewed emphasized specific barriers that are critical to overcome to successfully 

deploy AFVs. The most noted barriers from the literature are: 

• Availability of alternative fuel refueling infrastructure 

• Inconsistency in public policy and leadership messages 

• High costs of constructing refueling infrastructure 

• Low oil prices 

• Poor perceived or actual performance of AFVs (safety, power, attributes, range, reliability, etc.) 

• Competition against conventional fuel economies of scale 

• High costs of purchasing AFVs (compared with conventional vehicles) 

• Availability of AFVs 

• Lack of customer awareness and market acceptance 

• Lack of economic incentives 

• Alternative fuel availability 

• Lack of AFV service and maintenance training and technicians 

• Lack of trained fueling station operators 

• Poor fuel properties of alternative fuels 

• Inconsistent codes and standards 

The overall perspectives and outlooks from the literature were as varied as the authors. Government 

authors tended to focus more on the policy issues necessary for transition, while private sector writers 

addressed market factors and government support. In particular, much of the literature wrangled with 

the fleet concept that was the basis for alternative fuel deployment and how it related to consumer 

market development. 

The authors also identified and evaluated strategic focus areas used by the alternative fuels industry to 

overcome these barriers. The following list represents key activities that could be valuable in 

coordinating decision-makers and promoting advanced transportation technologies. 

4
• Fleets (private, state, federal) 

• Niche markets (airports, taxis, school buses, transit vehicles) 

• Outreach and education 

• Partnerships 

• Tax incentives 

• Grants and other financial incentives 

• Regulatory incentives 

• Research and development 

• Demonstration projects 

• Alternative fuel blends 

• State and federal leadership and program messages 

Barriers and strategies were ranked by the total number of times they were mentioned in the literature. 

They were then used as the basis for collecting feedback on AFV lessons learned feedback from two 

stakeholder groups. Results for the barriers are shown in Table 4 and the strategies are discussed below. 

Phase II—Collecting Expert Feedback: Barriers 

The literature search identified a set of barriers and strategies that were of particular concern to the 

deployment of AFVs. This information was used as a basis for gathering information from experts in 

the AFV arena—in this case NREL scientists and Clean Cities coordinators. 

NREL Transportation Technology Engineers/Scientists 

Working in partnership with public and private organizations, NREL researches, develops, and 

demonstrates innovative vehicle and fuel technologies that reduce the nation's dependence on imported 

oil, and improve our energy security and air quality. NREL’s goal is to help industry introduce 

advanced, low emission, economically competitive vehicles and fuels into the marketplace. Work in 

this area supports several NREL programs and is led by the Center for Transportation Technologies and 

Systems, which has a staff of more than 50 transportation-related engineers and scientists. 

NREL personnel involved in this data gathering were engineers and scientists who approached the issue 

from both a scientific and strategic management point of view. Participants represented professionals 

who have been involved in alternative fuels research, development, and deployment for up to 20 years. 

The objective of the NREL input was for a scoping of the work and initial validation of the barriers and 

strategies identified in the literature review. To assist with this scoping, six research scientists 

participated in a meeting to discuss the literature findings. 

The barriers were discussed in detail and prioritized by participant vote, which determined the top five 

barriers most critical to the deployment of advanced transportation technologies. The barriers were 

ranked based on the total number of votes they received. In addition, the NREL scientists identified two 

barriers that were not identified in the literature: 

• Lack of dealer/sales staff knowledge 

• Complexity of change is large 

The NREL ranked barriers are shown in Table 4. 

5
Local Clean Cities Coordinators 

Clean Cities was developed in 1993 in support of the goals of the Energy Policy Act (EPAct) of 1992. It 

is a network of 88 volunteer coalitions, which develop local public/private partnerships to promote 

alternative fuels and vehicles, fuel blends, fuel economy, hybrid vehicles, and idle reduction. Through 

its coalitions, Clean Cities draws local stakeholders from the public and private sectors. Stakeholders 

include local, state, and federal agencies; public health and transportation departments; transit agencies; 

auto manufacturers; car dealers; fuel suppliers; public utilities; and professional associations. Clean 

Cities believes that by building strategic partnerships on the local and national levels, it’s possible to 

align the most critical elements and decision-makers to transition from petroleum-based motor fuels. 

Clean Cities has been successful at implementing a national goal at a local level. Through their 

affiliation with Clean Cities, stakeholders have learned a lot about deploying AFVs and advanced 

technologies. 

Clean Cities coordinators are supporters of alternative fuel technologies that work in local and regional 

communities and organize local efforts to advance the goals of Clean Cities. From science and 

engineering to marketing and grant writing, these individuals have diverse backgrounds. Their common 

thread is that each coordinator supports advanced vehicle technologies on the local level, working 

closely with the key decision makers in their area. 

To collect input from coordinators, presentations were made at the following four regional Clean Cities 

meetings. 

• Midwest and southeast regions (July 2005) 

• Western region (August 2005) 

• Central region (September 2005) 

• Northeast region (October 2005) 

During each meeting, the overall project and objectives were presented, as well as the results from the 

literature review. General discussion was encouraged as time permitted and followed up with a 

questionnaire to quantify the significance of each (see Appendix B). Respondents were asked to rate 

each barrier from 1 to 5 (least to greatest) on the importance on their deployment activities. Barriers 

were ranked from these results by averaging the ratings of each barrier. Overall, more than 65 

coordinators participated in the discussions, and 20 (of 88) coordinators responded to the questionnaire. 

In addition to the barriers identified in the literature, Clean Cities’ coordinators identified one additional 

barrier: 

• No real commitment from original equipment manufacturers (OEMs). 

Complete results from the questionnaire barrier ranking are shown in Table 4. 

6
Table 4. Barrier Ranking Results 

Barriers Literature 

Rank 

NREL 

Rank 

Coordinator 

Rank 

Availability of alternative fuel infrastructure 1 1 1 

High cost of constructing infrastructure 3 8 2 

Availability of AFVs 8 3 3 

Inconsistent in public policy and leadership messages 1 5 4 

Competition against conventional fuel economies of scale 6 8 5 

Lack of economic incentives 10 5 5 

High cost of purchasing AFVs 6 2 7 

Lack of customer awareness and market acceptance 8 8 8 

Lack of AFV service and maintenance training and 

technicians 

10 8 9 

Lack of trained station operators 10 8 10 

Poor perceived or actual performance of AFVs 3 8 11 

Alternative fuel shortages 10 8 11 

Low oil prices 3 3 13 

Poor fuel properties of alternative fuels 10 5 14 

Inconsistent codes and standards 10 8 15 

Of the top eight results for each group (which represents the top 50% of barriers), five barriers were 

common for each group. In particular, availability of alternative refuel infrastructure was identified as 

the number one barrier by all groups. These five common barriers include: 

• Availability of alternative fuel infrastructure 

• High cost of constructing infrastructure 

• Availability of AFVs 

• Inconsistent public policy and leadership messages 

• Higher cost of purchasing AFVs 

Phase II—Collecting Expert Feedback: Strategies 

A short questionnaire was used to collect information on strategies from both groups of experts (see 

Appendix C). The NREL scientists and coordinators were given the questionnaire and asked to 

evaluate the impact of each strategy on their top two to four barriers they identified in this study. 

NREL experts were allowed to discuss the topic prior to and during the time they took to complete the 

questionnaire. Clean Cities coordinators filled in the questionnaire individually following the meetings 

when the topic was presented and discussed. 

Strategies were evaluated in terms of their ability to make a positive impact on the barriers. This is 

important because each strategy may impact each barrier to a different degree. Following is a summary 

of the results for the five common barriers identified by the experts. 

Barrier: Availability of Alternative Refueling Infrastructure 

Today, there are 770 natural gas stations and 550 E85 stations in the United States. Comparatively, 

there are more than 170,000 gasoline stations nationwide. This means that consumers that purchase 

vehicles intended to run on natural gas and E85 must make a greater effort to refuel than those who 

7
utilize conventional vehicles. To address this barrier, experts identified the following strategies as the 

most effective: 

1. Grants (for incremental vehicle cost and/or infrastructure) 

2. Tax credits (for vehicles and/or fuel) 

3. Regulations 

4. Partnerships 

Barrier: High costs to purchase AFVs (compared with conventional vehicles) 

A typical light-duty, natural gas vehicle costs roughly $3,000 or 10%-15% more than a conventional 

vehicle. Similar values are true for propane vehicles, and hydrogen fueled vehicles are anticipated to 

have even higher incremental costs initially (although they should be partially offset by operating costs 

due to higher efficiency). To address this barrier, experts identified the following strategies as the most 

effective: 

1. Tax credits (for vehicles) 

2. Grants (for incremental vehicle cost) 

3. Regulation 

4. Research and development (R&D) 

Barrier: Availability of AFVs 

Currently, approximately 15 million vehicles are sold annually in the United States. This includes 

passenger cars and light trucks. There are nearly 1,000 models that operate on conventional fuel. In 

contrast, there are roughly 20 models of alternative fuel vehicles available from OEMs – in limited 

quantities. To address this barrier, experts identified the following strategies as the most effective: 

1. Grants (for incremental vehicle cost) 

2. Regulations 

3. Tax Credits (for vehicles) 

4. Partnerships 

Barrier: Inconsistency in Public Policy and Leadership Messages 

Because of the complexity of the transition of the transportation to alternative fuels, there are many 

different messages and goals. There are two main areas where public policy consistency is important. 

The first is the overall message related to the significance of transition, including energy security, 

enhancement of domestic economy, and environmental stewardship. While all are good reasons for the 

transition of our transportation system, each one carries a different set of implementation strategies. The 

second message relates to the priorities of specific initiatives, such as specific fuels or technologies (eg: 

natural gas, ethanol, hybrids). Add to these continually shifting priorities, the different goals and 

objectives of state and local policy makers, and the challenge becomes even more complex. To address 

this barrier, experts identified the following strategies as the most effective: 

1. Tax Credits 

2. Regulation 

3. Grants 

4. Management and Coordination and Outreach (tie) 

8
Barrier: High Cost of Constructing Infrastructure 

Construction of alternative refueling infrastructure ranges from a few thousand dollars to add an ethanol 

pump to an existing station to up to $1 million for a new natural gas refueling island. Because of low 

sales volumes for alternative fuel relative to gasoline and diesel, the economic benefits are difficult to 

realize. To address this barrier, experts identified the following strategies as the most effective: 

1. Grants (for refueling infrastructure) 

2. Tax Credits (for fuel and infrastructure) 

3. Regulation 

4. Partnerships 

Figure 1 summarizes the overall results for each of the strategies for the preceding barriers. The majority 

of respondents believed that financial incentives (grants and tax credits) were of major importance for 

all the barriers. This does not seem surprising, as financing new technologies is a major issue across 

most industries. However, monetary support was not the only item of importance. The experts also 

indicated that partnerships, demonstrations and regulations were important. 

Every strategy was determined to be at least moderately valuable at addressing at least one variable. A 

full table showing the results for which strategies were important to each barrier is shown in Appendix 

D. 

Responses

Fleets

Niche Markets

Education and 

Outreach

Partnerships

Tax Credits

Grants and 

Incentives

Regulation

R&D

Demonstration 

Projects

Alternative Fuel 

Blends

National Voluntary 

Programs

Availability of Alternative Fuel 

Infrastructure Average (12)

Availability of AFV Average (5)

Inconsistent Public Policy and 

Leadership Messages Average (5)

High Cost of Purchasing AFVs Average 

(2)

High Cost of Constructing 

Infrastructure Average (3)

Top 10% 

10%-25% 

 

25%-50% 

Bottom 50% 

 

Figure 1. Summary of Strategic Impacts for the Critical Barriers 

Issues and Questions from the data 

R&D scored relatively low in four of the five barriers shown in Figure 1. This low score is likely due to 

the sample size and composition of stakeholders (many of the Clean Cities coordinators do not have a 

research or technical background). It can also be because much of the research on vehicle and 

infrastructure development has been done in the past 15 years, and that vehicles and infrastructure 

operate reliably today. 

Blends were not considered a highly effective strategy by the respondents. This is possibly due to the 

fact that a blend strategy (utilizing low-level blends as a way to build the biofuels production and 

9
delivery market) is relatively new to Clean Cities. Blends have only been considered part of the 

initiative since 2004. For example, coordinators generally consider B20 an alternative fuel instead of a 

blend. 

Surprisingly, participants did not consider fleets a particularly effective strategy. This departs from the 

literature results, which on many occasions (by several different authors) cited the fleet strategy as 

productive. This conflicting perspective could be the result of frustration on the part of coordinators that 

the technologies did not progress beyond fleets. Fleets seem to fall into the category of “critical but not 

sufficient.” 

It is unclear why respondents felt that grants, tax credits, and regulation helped address the barrier of 

inconsistent policies and leadership messages. This relationship is not intuitive, and should be explored 

further in future work. 

Major Messages from the Analysis 

During the course of data collection, several themes or insights were collected beyond the barriers and 

strategies. These insights could be of value to the hydrogen transition and are described in this section. 

Combination Fleet and Consumer Focus May be Best 

Alternative fuels efforts focused on deployment to fleets. Regulations affecting federal, state, and 

alternative fuel provider fleets spurred AFV sales, however they still represent less than 1% of the 

vehicles on the road today. Clearly, this limited fleet market was not sufficient to generate significant 

sales for vehicle manufacturers. However, the fleet focus was important as a learning tool for vehicle 

and refueling technologies, codes and standards, safety, and rollout and implementation issues. For 

these reasons, the experts strongly believed that a fleet introduction strategy was important but not 

sufficient to the widespread deployment of new vehicle technology. Finding a way to transition from 

fleets to consumers is equally critical. 

Analysis is an Important Tool 

Analysis is a critical piece of the transition strategy that was not well developed in the alternative fuels 

deployment process. Analysis is important to assess what strategies were and were not successful and to 

quantify those benefits, so limited resources can be spent on initiatives with the greatest impacts. Key 

measures were noted as environmental impacts, economic impacts, and oil displacement. In addition, 

experts believed “societal” impacts, such as less noise and clearer views, that affected consumer demand 

were not well communicated in the alternative fuels experience. 

Specific analytic tools that allow consumers and fleets to evaluate their own costs and environmental 

impacts, are critical for transition. Examples of these tools include fleet tools that discuss overall cost 

and/or emissions impacts of various (such as the Clean Cities’ Fleet Buyer’s Guide or EPA’s Freight 

Logistics Environmental and Energy Tracking Performance Model). Another example is a tool that 

evaluates operating costs over the life of a vehicle to help consumers understand economic benefits or 

penalties of purchasing advanced technology vehicles. 

Total Funding was Small and Inconsistent 

Funding related to the barrier of inconsistent policies and messages is also a challenge. As priorities 

shift from, say, an emphasis on environmental protection to energy security, funding for specific 

10
activities also shift. This discontinuity in programs was detrimental to transportation fuel transition, and 

experts cited a strong need for consistent messages and funding on initiatives. Additionally, funding in 

the alternative fuel transition tended to be based on specific activities and given a certain amount of 

funding instead of based on specific goals. Programs need to work from the goal back to funding 

requests, rather than start with funding requests and figuring out where the money will go. 

 

Need a National Plan for Transition 

A national plan with support at the local level is a good model for deployment of advanced vehicle 

technologies. The national plan needs to address goals and transition strategies that adjust with time and 

vehicle penetration. AFV deployment strategies were effective at the 0%-1% levels, but not at breaking 

into mainstream market. Transition strategies at 1% are different than strategies at 10%, and whatever 

plans for deployment are developed need to adjust at various levels to address different concerns at each 

level. 

Local Efforts Can Help When Funding is Limited 

Given that funding is always limited for any project or initiative, the ability to organize and strategize at 

a local community level is critical. From organizing partners to co-fund projects to arranging for vehicle 

users to fuel at a new station so that it can be profitable, the power to organize people and resources is an 

asset to transportation transition. The national plan/goals provides the motivation for local efforts, and 

targeted programs to pull local partners together seals the deal. 

Behavior to Purchase/Use AFVs is Often not Rational 

Overall, when considering cost, convenience, and familiarity, the rational consumer would generally 

choose against the alternative fuel or advanced technology vehicle. Building a case for change that 

overrides the comfort-level concerns of consumers is a big challenge that many of the activities 

discussed in this paper will be addressed. Developing projects and programs that quantify benefits 

and/or demonstrate intangible benefits are important. 

Conclusions and Recommendations 

The barriers identified in this study indicate that the hydrogen transition should focus on projects that 

address both vehicle and infrastructure availability and costs. A clear, consistent vision for the transition 

from petroleum-based fuels should also be established and communicated to hydrogen stakeholders. 

The list of suggested strategies to address these barriers indicates that economic support is a big factor, 

but not the whole story. Partnerships and leadership are also important, as is research and development. 

This partnership and coordination theme is especially important in relation to early transition, where 

having vehicles and infrastructure transition in parallel is critical to market success. 

To complete this analysis, and fully understand the most challenging barriers and effective strategies to 

address them, it is critical to collect input from a broader array of stakeholder groups, such as: 

• Manufacturers (vehicles, fuels) 

• Government regulators 

• Regulated fleets 

• Non-regulated fleets 

11
Housed at NREL, DOE’s Alternative Fuels Data Center features a wealth of information on current and 

historical policy and vehicle and infrastructure statistics, which could be analyzed to understand trends 

and market reactions to various programs. This data was collected to meet reporting requirements of 

EPAct of 1992. Additionally, data collection on specific projects or issues related to alternative fuel or 

advanced technology vehicles, such as hybrid or biofuels deployment patterns, would also be beneficial. 

This could help us understand the influence of policies and strategies on market development. In 2001, 

the National Conference of State Legislatures did this for states, and an update of that work—as well as 

an expansion beyond state fleets—could shed light on more current transition issues. 

Finally, to quantify the benefits of a fleet strategy, a detailed analysis of fleets answers to the following 

questions would be helpful: 

• What makes a critical mass? 

• Can fleets ever get us there? 

• Which fleets have most potential? 

• How do you transition from a fleet strategy to a consumer strategy? 

12
Acknowledgements 

This report was completed with the cooperation of many colleagues at the National Renewable Energy 

Laboratory. Thank you to: 

Paul Bergeron 

Ann Brennan 

Wendy Dafoe 

Dale Gardner 

Barb Goodman 

Maggie Mann 

Bob McCormick 

Vicky Putsche 

Mark Ruth 

And special thanks to the Clean Cities coordinators who submitted questionnaires for this report. 

13
Acronyms 

 

AFV Alternative fuel vehicle 

B20 Fuel blend of 20% biodiesel, 80% petroleum diesel 

DOE U.S. Department of Energy 

EERE Office of Energy Efficiency and Renewable Energy 

EPAct Energy Policy Act of 1992 

FCVT FreedomCAR and Vehicle Technologies Program 

E85 Fuel blend of 85% ethanol, 15% gasoline 

CNG Compressed natural gas 

HFC&IT Hydrogen, Fuel Cells, and Infrastructure Technologies Program 

H2 Hydrogen 

LPG Liquefied natural gas 

NRC National Research Council 

NREL National Renewable Energy Laboratory 

OEM Original equipment manufacturer 

R&D Research and development 

14
Appendices 

15
Appendix A: AFV Lessons Learned Literature Summary 

Author Affiliation Title Date Summary 

Wells, Jim 

Natural Resources 

and Environment 

Alternative Motor Fuels Impact on the Transportation 

Sector, Testimony before Committee on Finance, US 

Senate 7/10/01 

Overview of status of AF and AFVs. Lists basic barriers of low oil 

prices and inadequate incentives/funding 

Wells, Jim 

Natural Resources 

and Environment 

Research and Development, Lessons Learned from 

Previous Research Could Benefit FreedomCAR 

Initiative, Testimony to the HR 6/6/02 

Lessons learned, including be sure that the activities will impact the 

goal (i.e., AFV acquisitions when the goal is to reduce petroleum 

use), reevaluate regularly 

Brown, Matthew H.; 

Breckenridge, Leah 

National 

Conference of 

State Legislatures 

State Alternative Fuel Vehicle Incentives: A Decade 

and More of Lessons Learned 2/1/06 

Review of State incentives and which work: Focused, Large, Easy 

to Administer, Include infrastructure, grant based 

DeCicco, John M. 

Society of 

Automotive 

Engineers 

Fuel Cell Vehicles: Technology, Market, and Policy 

Issues 11/1/01 

To deploy fuel cell vehicles we'll need technology advancement for 

vehicles, cost reduction, resolution of infrastructure barriers 

Jackson, Michael D.; 

Kaahaaina, Nalu; Fable, 

Scott 

Arthur D Little, 

Acurex 

Environmental 

Lessons Learned from Past Strategies to Reduce 

Petroleum Dependence 9/17/01 

Strategies include improved efficiency, advanced technologies, 

alternative fuels, affecting consumer behavior, and laws and 

incentives 

Patterson, Phil; Alson, 

Jeff; Lance, Linda; 

Brown, Kelly; Hawkins, 

David; Ditlow, Clarence; 

Dana, Greg Various 

Lessons from 30 Years of Automotive Energy and Air 

Quality Policy: An Interactive Round Table 6/21/05 

Asilomar proceedings: Congestion is number one concern of 

consumers, consumers don't know about the technology of their 

vehicles 

McCormick, Gary L.; 

Russell, Richard B. 

Gannett Fleming, 

Inc. Alternative Bus Fuels: What Have We Learned 

Successful AF bus fleets: Investigate fuels, Understand costs and 

budget, plan for today and future use, research long-term fuel 

contracts, assemble team of experts, work with local officials, 

training 

Leiby, Paul; Rubin, 

Jonathan ORNL, U of ME 

Transition Modeling of AFVs and Hybrids: Lessons 

Learned 7/3/05 

Key transition barriers: vehicle and infrastructure, fuel availability, 

poor economies of scale, poor diversity of choice, low oil prices 

Nesbitt, Kevin; Sperling, 

Daniel 

University of 

California, Davis 

Myths Regarding Alternative Fuel Vehicle Demand by 

Light-Duty Vehicle Fleets 6/20/05 Review of fleets as early adopters 

Leiby, Paul; Rubin, 

Jonathan ORNL, U of ME 

Understanding the Transition to New Fuels and 

Vehicles: Lessons Learned from Analysis and 

Experience of Alternative Fuel and Hybrid Vehicles 10/31/03 

AFVs are mature technology, but not in the marketplace; review of 

issues in the deployment of AFVs 

Baxley, Phillip; VerdugoPeralta, Cynthia; Weiss, 

Wolfgang 

CA Hydrogen 

Highway 

California Hydrogen Highway Network Rollout 

Strategy Topic Team 11/28/04 

Niches worked but it is difficult to translate that into widespread 

commercial acceptance 

Zhao, Jimin; Meliana, 

Marc W. 

University of 

Michigan 

Transition to Hydrogen-Based Transportation in 

China: Lessons Learned from Alternative Fuel 

Vehicle Programs in the US and China 7/4/06 

Experience, Barriers, and recommendations: focus on hybrids near 

term, review and balance options, specify goals, education and 

marketing are key, coordinate vehicles/infra/maintenance 

Santini, Danilo J.; Vyas, 

Anant D. ANL 

How is Technology Adopted? A Discussion of 

Hybrid-Electric and Diesel Technology Consumer 

Preferences 1/10/04 Review of hybrid buyers preferences 

Parish, Richard NREL 

Implementing Alternative Fuels in Transportation 

Vehicles 6/27/05 List of factors affecting market penetration of AFVs 

Wells, Jim 

Natural Resources 

and Environment 

Energy Policy Act of 1992: Limited Progress in 

Acquiring Alternative Fuel Vehicles and Reaching 

Fuel Goals, GAO Report 2/1/00 Overview of EPAct progress and issues with EPAct mandates 

Schulte, Inga; Hart, 

David; van der Vorst, 

Rita 

Imperial College 

Center for Energy 

Policy and 

Technology Issues Affecting the Acceptance of Hydrogen Fuel 9/2/03 

Review of market research on what consumers think of H2 vehicles 

and fuel and what motivates purchase decisions 

16
US DOE 

Clean Cities 

Program Clean Cities 2004 Roadmap 6/26/05 

Overview of Clean Cities portfolio and barriers to the 

implementation of each technology/strategy 

McNutt, Barry; Rodgers, 

David US DOE 

Lessons Learned from 15 Years of Alternative Fuels 

Experience, 1988 to 2003 6/25/05 

Lessons learned, including niches don't translate into broader 

market; economies of scale of conventional fuels a difficult barrier 

Robertson, Bernard I.; 

Beard, Loren K. Chrysler 

Lessons Learned in the Deployment of Alternative 

Fueled Vehicles 6/26/05 

Must have broad/accepted goals, rely on total life cycle analysis, 

viewed as a system (vehicles and infra), government must level 

playing field with conventional fuels 

DeCicco, John M. 

Environmental 

Defense 

The "Chicken or Egg" Problem Writ Large: Why a 

Hydrogen Fuel Cell Focus is Premature 6/26/05 

Sperling, Dan; Cannon, 

James S UC Davis Hydrogen Hope or Hype 6/26/05 

 

Research Reports 

International The Market for Alternative Fuel Vehicles 12/4/06 

Review of mfg. Activities, federal and state programs, progress in 

AF to date. 

Gross, Tom 5/5/06 

Current federal policy for R&D is not enough. Need to develop 

marketplace. Start with distributed generation then transfer to APU 

and Vehicles. 

Baxter-Clemmons, 

Shannon Cal EPA 

California Hydrogen Highway Network Rollout 

Strategy 5/5/06 

Steps to implementation: Top down leadership, implementation 

strategy, stakeholder buy-in, phased approach 

 

CONEG Policy 

Research Center 

Refueling Alternative Fuel Vehicles: Lessons 

Learned from the Marketplace 5/1/95 

DeCicco, Johm M. etc. ACEEE 

Transportation on a Greenhouse Planet: A LeastCost Transition Scenario for the United States 

 US DOE 

A National Vision of America's Transition to a 

Hydrogen Economy - to 2030 and Beyond 2/1/02 

 US DOE National Hydrogen Energy Roadmap 11/1/02 

 US DOE Hydrogen Posture Plan 2/1/04 

 10 CFR Part 490 

Alternative Fuel Transportation Program: Private and 

Local Government Fleet Determination 1/29/04 

Review of program status and potential for petroleum 

displacement. Options described briefly 

Lovins, Amory B.; 

Williams, Brett D. 

Rocky Mountain 

Institute A Strategy for the Hydrogen Transition 4/1/99 

Focus on decentralized production of H2 for max. benefits. 

Distributed power applications first with transportation to follow. 

Greene, David L. ORNL 

Climate Change Policy for Transportation while 

Waiting for H2 

Need incentives to stimulate GHG reductions to promote H2 as an 

energy carrier for transportation. 

 Cal EPA California Hydrogen Blueprint Plan, volume 1 5/1/05 Background, rational, and phase-in plan description for CA H2H 

17
Appendix B: Barriers Questionnaire 

Below is a list of barriers to the transition to widespread introduction of alternative fuels. Using the 

ranking system below, prioritize these barriers. This includes how important it is to transition and how 

challenging it is to overcome. 

5 - Very Significant 

4 - Effective 

3 - Somewhat Significant 

2 - Not Significant 

1 - Not a Barrier/Not Applicable

Barriers Degree of Difficulty 

Availability of alternative fuel refueling infrastructure 

Inconsistency in public policy and leadership messages 

Poor perceived or actual performance of AFVs (safety, power, attributes, range, 

reliability, etc.) 

High costs to construct refueling infrastructure 

High costs to purchase AFVs (compared with conventional vehicles) 

Competition against conventional fuel economies of scale 

Availability of AFVs 

Lack of customer awareness and market acceptance 

Alternative fuel shortages 

Poor fuel properties of alternative fuels 

Lack of AFV service and maintenance training and technicians 

Lack of trained fueling station operators 

Lack of economic incentives 

Inconsistent codes and standards 

Low oil prices 

18
Appendix C: Strategies Questionnaire 

Below is a list of strategies that have been used to promote alternative fuels. Please fill in two to four 

barriers you think are the most significant in the far left column. Then, using the ranking system below, 

enter the effectiveness of each strategy in addressing that barrier. 

5 - Very Significant 

4 - Effective 

3 - Somewhat Significant 

2 - Not Significant 

1 - Not a Barrier/Not Applicable 

Most Significant 

Barriers 

Fleet 

Focus 

Niche 

Market 

Focus 

Outreach 

& 

Education Partnerships

Tax 

Incentives

Grants & 

Other 

Financial 

Incentives

Regulatory

Incentives R&D 

Demo 

Projects 

Alt. Fuel 

Blends

Overall 

Coord. 

& Project 

Mgmt. 

Please list any other comments or issues related to barriers or strategies to address them that have been 

most or least effective. 

19
Appendix D: Strategies Most Important for Each Barrier

Most Significant 

Barriers (Number of 

Responses) 

Fleet 

Focus 

Niche 

Market 

Focus 

Outreach 

& 

Education Partnerships Tax Incentives

Grants & 

Other 

Financial 

Incentives

Regulatory 

Incentives R&D 

Demo 

Projects

Alt. Fuel 

Blends

Overall 

Coord. & 

Project 

Mgmt. 

Availability of Alt. 

Fuel Infrastructure 

(13) 3.50 3.25 3.23 3.83 4.25 4.50 3.92 2.62 3.00 2.58 3.18 

Availability of AFVs 

(5) 3.80 3.80 3.40 4.00 4.00 4.00 4.00 3.60 4.20 2.60 2.60 

Competition against 

conventional fuel 

economies of scale 

(3) 4.33 3.33 3.33 3.33 4.67 3.67 3.00 2.67 4.00 3.67 4.00 

High costs to 

construct refueling 

infrastructure (3) 3.00 2.67 2.33 3.33 4.33 4.67 4.00 2.67 2.67 2.00 2.00 

Inconsistency in 

public policy and 

leadership messages 

(5) 2.40 2.00 3.20 2.80 3.80 3.40 3.40 2.80 2.60 2.00 3.20 

Inconsistent codes 

and standards (2) 2.00 1.00 3.50 4.00 4.00 4.00 4.50 4.50 4.00 3.50 4.00 

Lack of Consuemr 

Awareness (5) 3.40 3.40 5.00 4.20 3.60 3.40 3.40 3.20 3.40 3.40 3.80 

Poor percieved or 

actual performance 

(4) 3.75 3.75 4.25 2.75 3.25 3.25 2.50 3.50 3.75 2.25 3.25 

Higher relative fuel 

costs (2) 3.00 3.00 2.00 3.00 3.50 3.50 3.00 2.00 1.50 2.50 2.50 

High costs to 

purchase AFVs (3) 2.50 1.50 2.00 2.00 4.67 4.50 3.50 3.00 1.00 1.00 1.00 

Lack of available 

grant funding at all 

levels for 

development of 

compliant prototype 

heavy duty alt. fuel 

vehicles 5.00 5.00 2.00 5.00 5.00 5.00 5.00 5.00 5.00 2.00 5.00 

Real OEM 

Commitment (2) 4.00 N/A 5.00 4.00 4.50 5.00 5.00 5.00 N/A N/A 5.00 

Irrational 

Behavior/Not a good 

business case (2) 3.00 3.00 2.50 2.00 3.50 3.00 3.00 1.00 2.00 3.00 2.00 

Inconsistent fuel 

properties (1) 3.00 3.00 4.00 2.00 2.00 2.00 4.00 4.00 4.00 1.00 1.00 

Complexity of 

change (1) N/A N/A 3.00 N/A 3.00 4.00 N/A N/A N/A N/A N/A 

OEM/Dealer 

education and 

knowledge (1) 5.00 5.00 5.00 5.00 5.00 5.00 1.00 1.00 4.00 N/A 5.00 

Lack of local fuel 

supplier (1) 5.00 5.00 2.00 5.00 5.00 5.00 5.00 5.00 5.00 2.00 5.00 

20
F1147-E(12/2004) 

REPORT DOCUMENTATION PAGE Form Approved 

OMB No. 0704-0188

The public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, 

gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this 

collection of information, including suggestions for reducing the burden, to Department of Defense, Executive Services and Communications Directorate (0704-0188). Respondents 

should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information if it does not display a 

currently valid OMB control number. 

PLEASE DO NOT RETURN YOUR FORM TO THE ABOVE ORGANIZATION.

1. REPORT DATE (DD-MM-YYYY)

February 2006 

2. REPORT TYPE

Technical Report 

3. DATES COVERED (From - To)

5a. CONTRACT NUMBER

DE-AC36-99-GO10337 

5b. GRANT NUMBER

4. TITLE AND SUBTITLE

Transitioning to a Hydrogen Future: Learning from the Alternative 

Fuels Experience 

5c. PROGRAM ELEMENT NUMBER

5d. PROJECT NUMBER

NREL/TP-540-39423 

5e. TASK NUMBER

HS06.1002 

6. AUTHOR(S)

M. Melendez 

5f. WORK UNIT NUMBER

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)

National Renewable Energy Laboratory 

1617 Cole Blvd. 

Golden, CO 80401-3393 

8. PERFORMING ORGANIZATION 

REPORT NUMBER

NREL/TP-540-39423 

10. SPONSOR/MONITOR'S ACRONYM(S)

NREL 

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES)

11. SPONSORING/MONITORING 

AGENCY REPORT NUMBER

12. DISTRIBUTION AVAILABILITY STATEMENT

National Technical Information Service 

U.S. Department of Commerce 

5285 Port Royal Road 

Springfield, VA 22161 

13. SUPPLEMENTARY NOTES

14. ABSTRACT (Maximum 200 Words)

This paper assesses relevant knowledge within the alternative fuels community and recommends transitional 

strategies and tactics that will further the hydrogen transition in the transportation sector. 

15. SUBJECT TERMS

Hydrogen; infrastructure; transition; alternative fuels; vehicles; hydrogen transition 

16. SECURITY CLASSIFICATION OF: 19a. NAME OF RESPONSIBLE PERSON 

a. REPORT 

Unclassified 

b. ABSTRACT 

Unclassified

c. THIS PAGE 

Unclassified

17. LIMITATION 

OF ABSTRACT

UL 

18. NUMBER 

OF PAGES 

19b. TELEPHONE NUMBER (Include area code)

Standard Form 298 (Rev. 8/98) 

Prescribed by ANSI Std. Z39.18