NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Alternative Fuels Market 

and Policy Trends

Alex Schroeder

National Conference of State 

Legislators (NCSL) Webinar on 

Alternative Fuels

June 21, 2013

NREL/PR-5400-59328
2

National Renewable Energy Laboratory

Only national laboratory dedicated solely to energy efficiency and renewable energy

• Leading clean-energy 

innovation for 35 years

• About 1,700 employees 

with world-class facilities

• Campus is a living model 

of sustainable energy

• Owned by the 

Department of Energy

• Operated by the Alliance 

for Sustainable Energy
3

Alternative Fuel Market and Policy Trends

Synopsis

• Market Overview and Trends

• Market Barriers and State Policies

Key Points

• Market Forces and Policies are Increasing Opportunities for Alternative 

Fuels

• There is No One Size Fits All, Catch All, Silver Bullet to Do it All 

• States Play a Critical Role in the Alternative Fuel Market and are Taking a 

Leading Role
4

People are Driving Less, but Spending More to Do So 

Average Annual Vehicle Miles 

Traveled

Average Per Capita Annual 

Energy Expenditures

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Transportation

Residential

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Annual Miles Driven

Source: U.S. Energy Information Administration and U.S. DOE Alternative Fuels Data Center
5

Newly Accessed Oil Supplies are Changing the Conversation

....kind of

Reduced Dependence on Foreign Oil

Decreasing Consumption

Possibility of Being Net Exporter of Petroleum

Market Growth Being Driven by Other Countries

Global Refining Capacity is Limited

Other Forces are Driving Us Away From Petroleum

New York Times (3/22/12)
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We are Still Dependent on a Single Fuel

Annual U.S. Fuel Consumption 

All Transportation

~93% comes from petroleum

4.9 Billion Barrels of Oil Annually

Light Duty Market

3.1 Billion Barrels of Oil Annually

63% of total petroleum use

Heavy Duty Market

1.1 Billion Barrels of Oil Annually

22% of total petroleum use

natural gas

39%

coal

30%

petroleum

5%

conventional 

hydro

8%

renewable

6%

nuclear

10%

other

2%

Electric Generation Capacity (2011)

petroleum

93%

7%

Transportation Fuels Portfolio (2011)

Source: U.S. Energy Information Administration
7

Alternative Fuel Consumption Does not Correlate with 

Vehicle Availability

Liquefied 

Petroleum 

Gas (LPG)

27%

Compressed 

Natural Gas 

(CNG)

46%

Liquefied 

Natural 

Gas 

(LNG)

6%

85% Ethanol 

(E85)[1]

20%

Electric [2]

1%

Estimated Consumption of Alternative Fuel 

by AFVs in the U.S. (2010)

Liquefied 

Petroleum 

Gas (LPG)

15%

Compressed 

Natural Gas 

(CNG)

12%

Liquefied 

Natural Gas 

(LNG)

1%

85% Ethanol 

(E85)

66%

Electric

6%

Estimated Alternative Fueled Vehicles in 

Use (2010)

www.afdc.energy.gov/afdc/data/
8

Different Vehicle Classes Have Different Needs

12,950

11,702

9,877

3,434

3,392

2,029

1,896

1,423

898

531

453

33

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Gallons per Year

Average Annual Fuel Use by Vehicle Type

www.afdc.energy.gov/data/
9

AFV Infrastructure is Growing...

 -

 5

 10

 15

 20

 25

Thousand Stations

U.S. Alternative Fueling Station Count

Electric*

Propane

Methanol (M85)

LNG

Hydrogen

Biodiesel**

CNG

E85

www.afdc.energy.gov/data/

...but has a long way to go. There were 157,000 gasoline 

stations in the United States in 2011
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National Policies are Shaping the Market

CAFE Standards Renewable Fuel Standard II

0

10

20

30

40

50

60

Miles Per Gallon

Passenger Cars

Light-Duty Trucks

0

5

10

15

20

25

30

35

40

Billion Gallons

Other Advanced Fuels

Biomass-based Diesel

Cellulosic

Conventional (starch ethanol)

www.afdc.energy.gov/afdc/data/
11

States Taking the Lead - Multi-State NGV MOU

Multi-State Memorandum of 

Understanding

 16 Governors agreed to aggregate state vehicle 

procurement in a Joint RFP; utilize local 

distribution networks

 Engage local government in procurement to the 

extent practicable

 OEM NGV should have comparable performance 

and price to a gasoline vehicle

 Encourage private investment in NGV 

infrastructure

 Reach out to fellow Governors to encourage 

participation 

 Vehicle orders are currently being filled for 1st

year effort 
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States Taking the Lead – Zero Emission Vehicles

Zero Emission Vehicle Standards

 The Clean Air Act allows California to pass more 

stringent emissions standards than the federal 

government. 

 California’s zero emissions vehicle standard 

requires that by 2025, 15.4% of all vehicles sold 

will need to produce zero emissions. This is 

estimated to be equivalent to 1.4 million 

vehicles. 

 10 states and Washington DC have adopted 

California’s zero emission vehicle requirements. 

 ZEV states account for almost 1/3 of new car 

sales.

 Hydrogen and plug-in electric vehicles are being 

pursued by multiple automakers as a means to 

meet ZEV requirements. 
13

Trends in State Policy for Alternative Fuels

0 2 4 6 8 10

AK

AR

CA

CO

DC

FL

GA

IL

IN

KY

LA

MA

MD

MO

MS

NC

NE

NH

NJ

NY

OR

PA

RI

SC

SD

TN

UT

VA

VT

WA

WY

-2012 Laws, Regulations, and Incentives by State
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Grants

19%

Loans and 

Leases

19%

Other

12%

Rebates

37%

Tax Incentives

13%

Type of Incentive Targeted Market

Regulatory Topic Fuel/Technology

Aftermarket 

Conversions

5%

Biodiesel

7%

Ethanol

7%

EVs

19%

Fuel Economy / 

Efficiency

3%

HEVs / 

PHEVs

16%

Hydrogen Fuel 

Cells

6%

Idle 

Reductio

n

2%

Natural Gas

19%

NEVs

1%

Other

4%

Propane (LPG)

11%

Acquisition / 

Fuel Use

15% Air Quality / 

Emissions

5%

Climate Change 

/ Energy 

Initiatives

15%Driving / 

Idling

7% Fuel 

Productio

n / 

Quality

4%

Fuel Taxes

7%

Other

34%

Registration / 

Licensing

13%

AFV 

Manufacturer/R

etrofitter

4%

Alternative Fuel 

Dealer

8%

Alternative 

Fuel 

Producer

3%

Alternative Fuel 

Purchaser

3%

Fleet 

Purchaser/Man

ager

29%

Fueling / TSE 

Infrastructure 

Owner

15%

Other

18%

Vehicle 

Owner/Driver

20%

Trends in State Policy for Alternative Fuels

-2012 Laws, Regulations, and Incentives by Type

www.afdc.energy.gov/afdc/data/
15

Alternative Fuel Incentives and Regulations - Infrastructure

Sample Incentives for Infrastructure

Arizona

Up to $75,000 is available to public and private entities for the incremental 

cost of projects that result in new or converted biofuel storage and 

dispensing equipment.

Colorado

Provides grants for electric vehicle charging stations to government entities 

and multi-family dwellings. Initial funding was from DOE and is 

supplemented by a decal that EV owners purchase.

Wyoming

Provides low-interest loans of up to $750,000 for the installation on CNG 

infrastructure. Loans payments are not required in the first two years.

US DOT – CMAQ Funding

Federal formula funding that is distributed to the states for projects that 

support air quality improvements and congestion mitigation. Funding has 

been applied towards both alternative fuel stations and vehicles. 

 

For more details on incentives, visit: www.afdc.energy.gov
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Defining the Role of Utilities for NGVs and EVs

Transportation has significant, but 

uncertain, growth potential for electric 

and gas utilities

o Every electric car is a natural gas car is an electric car

o Electric demand is flat in most parts of the country

o Most state utility markets are regulated requiring a 

dialog between utilities, regulators, policymakers, and 

other stakeholders

Examples of key utility considerations in 

the development of alternative fuel 

infrastructure

o Electric demand charges 

o Provisions for third-party sales of regulated 

services/products

o Infrastructure/construction allowances
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Alternative Fuels and Excise Taxes

• Increased efficiency and alternative 

fuel use is straining gas tax revenues

• Several states have decal programs 

for various alt fuels

• Some states provide discounted rates 

for alt fuels as an incentive

• If taxes are charged on a per gallon 

basis, defining energy content is 

needed to ensure parity

• There are no current programs that 

compensate directly for home 

fueling/charging 0 0.5 1 1.5 2

Gasoline (regular)

Diesel #2

Biodiesel (B100)

Biodiesel (B20)

Liquid Natural Gas (LNG)

Propane (LPG)

Ethanol (E85)

Gasoline Gallon Energy Equivalence 
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Questions?