Decarbonizing Medium and Heavy-Duty Vehicles | Episode 39

  January 04, 2022

There is incredible diversity among the types of vehicles and use-cases in both the medium-duty class and heavy-duty class which must be taken into account when considering decarbonization options. It turns out that just a few applications actually represent the vast majority of emissions, so you will have the most impact by targeting those applications first.


Scott Shepard, Guidehouse


Announcer (00:03):
Welcome to Carpool Chats, a podcast brought to you by the Fuels Institute.

John Eichberger (00:08):
Hey everybody. Welcome back to Carpool Chats. I'm John Eichberger, with the Fuels Institute. Today, we're joined by Scott Shepard with Guidehouse Insights. And we have just recently been working with Guidehouse on a new paper that's going to be coming out here pretty soon, focused on the medium and heavy duty vehicle space. We took a look at the market. We're getting too much commentary often in the public that a one size fits all strategy works. And we started looking at the medium, heavy duty vehicle space, something a little more challenging in that space. So, Scott, thank you very much for joining us here on Carpool Chats.

Scott Shepard (00:39):
Thank you for having me, John.

John Eichberger (00:42):
So we asked you guys to take a look at the market and we really wanted to do is to dimensionalize what that market is comprised of. So you got classes three through eight, in terms of vehicle size. But within each class, there's a variety of different vehicles, different duty cycles, different use cases. Can you give us a high level overview of what you guys found when you build into this?

Scott Shepard (01:01):
Yeah, certainly. As you described it, the class of medium, heavy duty vehicles is just highly diverse. Typically, the industry breaks it up into medium duty classes and heavy duty classes. And the heavy duty vehicles are the ones that you're probably most familiar with. They're the semi-trucks that are going down the high highway. But sometimes, they're developed in a rigid chassis format and whatnot. They serve a variety of applications, which has significant impacts on what type of technologies they're going to need, because they might be traveling very long distances or maybe they're just used for shorter hauling trips based off of a more regional travel pattern.

Scott Shepard (01:48):
And then in the medium duty classes, there's even more variance. And we're talking about school buses, we're talking about strip chassis delivery vehicles, like you would see for UPS or FedEx, large pickup trucks that are often used in construction sites and ambulances, fire trucks, things like that. Fire trucks are more heavy duty. But the variance there just in terms of body design, technology type creates all these challenges in terms of a market for scale, which has implications for new technologies entering into this field, as well as use patterns. And as I said, with the heavy duty trucking side, the variance there makes for a lot of challenges in the industry.

John Eichberger (02:39):
Now, a lot of the attention of the decarbonization effort across the globe is been on the passenger vehicle because they're the most numerous types of vehicles. You have a lot more passenger type vehicles out on the roads than you do the meeting with heavy duty. But when we look at the carbon emission profile of this sector, it packs a much bigger wallop per unit than the passenger vehicle market, doesn't it?

Scott Shepard (03:00):
Yeah. Significantly more so. I would say the logistics argument would come back and say, but they're also more efficient in terms of tons per kilometer or passenger per kilometer, and that should be noted as well. But definitely decarbonizing one medium or heavy duty vehicle would have a far more significant impact than decarbonizing one light duty vehicle.

John Eichberger (03:26):
But that leads us to the question is, how do you do it? How do you do it in a way that is economical? How do you do it in a way that's effective? The economy in the US rides on the back of these vehicles, that these vehicles are not economical, then the economy's going to suffer. So when you started looking at it, what were the attributes of the vehicles and their use and duty cycles that you were looking at to determine how easy they might be to effectively reduce their carbon emissions?

Scott Shepard (03:53):
Yeah, there are a few different factors. Some of them might not be all that surprising. One is having a duty cycle that is not as highly utilized. So on the spectrum of high utilization versus low utilization, really looking at those vehicles, which can have lots of downtime. They are consistently parked in the same location so that the fleet manager or the property manager might be able to install the appropriate alternative fuels infrastructure, if that is the solution. Additional to that, the availability of capital for some of these fleets and that availability largely depends on the size of the fleet and it depends on who the stakeholders of that industry are. So for instance, those fleets that are large in serving communities that are vulnerable or for a public good, are likely to see a lot more funds come their way because of the visibility of their duty cycle. So those are some of the main indicators of where decarbonization is going to happen first. Large fleets, lower, more addressable duty cycles that return to fleet depots.

John Eichberger (05:22):
And then when you look at it, you have those things, where are they operating? How important is it? What kind of pressures are they getting to decarbonize? I think one of the things in the paper was if you're operating out in the middle of nowhere, in the middle of the desert, in the middle of the plains, you're not going to get a lot of external pressures to reduce your carbon emissions as if you were in downtown metropolitan areas where the focus is a little more centered on the environmental conditions. So that operating territory has a pretty big impact too, doesn't it?

Scott Shepard (05:55):
Yeah, definitely. And there is an alignment between what is called as the local air pollutants for the urban environment, which is an additional driver for decarbonizing solutions. And carbon emissions are not a local air pollutant in that capacity, but often the decarbonization solution, like electricity or hydrogen, would also have a benefit for local air pollutant emissions reductions. So that's why, in certain markets and in the urban environment specifically, the last mile delivery vehicles, school buses, have really attractive attributes for decarbonization.

John Eichberger (06:44):
That's the other thing. We get so caught up in carbon because that's the global thing. But carbon emissions have a long term impact on the environment. Criteria pollutants, local pollutants, air pollutants have a direct impact on public health in the environment today, it's so important that we keep the discussion about all the emissions. I'm guilty of it too, talking about decarbonization as we started this discussion. But there are so many other factors we need to be paying attention to. We've made a huge progress in these air polluting emissions, but there's still progress that can be made and we have to keep that part of the conversation as well as we have to keep part of the conversation, the impact on the consumer.

John Eichberger (07:23):
And I'm talking the families, I'm talking about the businesses that run these vehicles, all these things have to come together if we're going to be successful in improving the environmental profile of the transportation space. And one of the things I loved about the paper was you took a look and you rank ordered different types of vehicles based upon which ones lend themselves most easily to a decarbonization strategy and those that maybe lend themselves least easily. But you also looked at when you broke those down, I think it was a top five and a bottom five vehicle types and use cases. And those 10 categories represented 80, 85% of all emissions from the sector, right?

Scott Shepard (08:02):
Yeah, yeah. And you find that there are really, at the end of the day, just a few applications. And it may not be surprising, just a few applications that really account for the vast majority of emissions, talking mostly in freight. So talking mostly here about long haul trucking, regional cargo deliveries, last mile cargo. Those are the big areas where emissions are really produced and that's the majority, but there's also many different use cases where emissions are also produced, but really, you're going to get the biggest bang for your buck by targeting those sectors.

John Eichberger (08:45):
So what are some of those sectors we need to be paying attention to? The bottom line is we're not going to be able to do everything at once, so we need to prioritize where we can achieve the greatest progress. So if we were to identify a couple areas that we should really be focusing, what are the ones that seem to yield the best opportunities for us?

Scott Shepard (09:02):
Yeah, yeah. The best bang for your buck at this point in terms of getting technologies developed, get them in the market, produce some scale so you can address some of those harder to address opportunities, it's going to be school busing, public transit, refuse trucking. Those are examples of great opportunities for the duty cycle, as well as the affected market and urban operating environment as well. So there are local air quality benefits. And then last mile cargo and regional and cargo, you're talking about big fleets here with sensitivity to major corporates that are really driving home the need to reduce carbon emissions of their supply chain. So those are the great opportunities to really get into scale development of decarbonization solutions. Sorry, go ahead.

John Eichberger (09:59):
You had mentioned earlier the stationary application, how long are they at one location. The categories you just rattled off in the initial list, really the return on home fleets. So you don't need a robust infrastructure if you use an alternative energy source, alternative powertrain, because you can centrally locate those where the vehicles are parked overnight or throughout the day.

Scott Shepard (10:20):
Yeah, that's true. And in some cases, some of these applications are not monoliths of course. So like regional cargo and last mil cargo, there is a little variance in how the fleet vehicles are owned and where they return at night. So there is going to be some demand for infrastructure solutions outside of the fleet depot, but the operators here are likely going to be able to partner with their major corporate customers to develop solutions. And in some cases, the fleets will be able to use some infrastructure solutions that are already in place. There are, primarily in the heavy duty segment, no good infrastructure solutions in place yet for these vehicles. So that's a whole issue that needs to be planned for and prepared for.

John Eichberger (11:17):
But we have to recognize, yeah, we want to decarbonize, we want to reduce the emissions, but we have to keep economy running. And so we do what we can for those vehicles that lend themselves to easier applications, more cost effective applications to reduce emissions on those hard to abate sectors. You know what? Diesel is still a great fuel for transportation energy. We're seeing advancements in renewable diesel and biodiesel. They can help reduce the carbon intensity of the fuel. There are things we can do on the external edges to reduce the carbon footprint while new technologies are developed.

John Eichberger (11:57):
And I get so frustrated. It seems like everybody wants to jump from here all the way to the end, but there's so many incremental steps we have to take to get there. I know you guys, beyond this paper, you guys have been looking at the transportation energy sector for a long time looking at electrification. From your perspective, Scott, what are some of the technologies and some of the fuels or energy sources we really need to be thinking about leveraging in both the near term and the longer term, to move us down the path towards a lower emissions transportation space for the commercial vehicle fleet?

Scott Shepard (12:28):
Yeah, that's a great question. And yeah, I totally agree with you that it seems like the conversation gets focused on one type of technology solution and that creates problems in the near term. All the solutions should be on the table and we should have methods for giving developers in this area the right incentives to provide these solutions to the transportation industry. And I don't mean just class three through eight trucks, I mean the entire transportation scene.

Scott Shepard (13:04):
And the reason why I say that is because the solutions that would lower the carbon intensity of diesel, whether or not diesel is powering trucks in the future, those decarbonizing solutions for diesel can play a role in decarbonizing other modes of transport as well. And those modes are even more difficult to decarbonize than heavy duty trucks. So investment is needed throughout all solutions to make everything possible, as it pertains us to those technologies that are going to be really important to decarbonizing the sector. Basically, it's a long list, electrification is way up there, can take off a chunk of the market. Specifically, those medium duty use cases. But we're going to need hydrogen, we're going to need renewable natural gas, renewable diesel, HVO, basically a panoply of different fuels and technologies are going to be needed in this space and beyond.

John Eichberger (14:09):
I think we can look at examples and leadership. So you've got the major freight haulers. I don't want to use names, but we know who they are. And look at how they are deploying different solutions in different markets. You mentioned a medium duty case where a delivery vehicle might be doing a 250 mile route or 150 mile route per day. They're out for seven or eight hours, but they come back to a depot. They're very amenable to electrification. That long haul, refrigerated, sleeper cabin tractor trailer may not be amenable to electrification. So we need to be thinking about how can we make progress there.

John Eichberger (14:47):
And I think you and I are right on the same page. There's so many options that if we remain open to them and explore them for their feasibility, their effectiveness, we can make a great deal of progress. And when we think about carbon, a ton of carbon emitted today is still here in 50 years. So let's go ahead and start pulling as much out of the emissions profile as we can, as we perfect other alternatives that might move us further down the line. And I love your point that we can learn a lot from what we're doing in the transportation space for non-road transport options as well, which are much more challenging to affect change than what we're seeing on the road fleet.

Scott Shepard (15:28):
Yeah, definitely. And I add to that, that getting too focused on one particular solution creates a risk. Not everything is clear five years out, 10 years out. And if we become too focused on one solution, we might not reduce as many emissions as we would have in the near term and it'd be hard to pay those emissions back in the long term. So it's best right now to still have an open mind.

John Eichberger (16:00):
I think what happens is politicians, and I've worked with them for years and years and years, they need to sell something to the constituents and getting complex does not work. And so you need to simplify, you need to deliver in a soundbite, in a stump speech. And my concern is starting to become even stronger these days that we seem to be pursuing a strategy to electrify rather than a strategy to reduce emissions. And we're conflating the potential solution with the challenge we're trying address. And to your point, if we stay focused on what is it we're trying to do? We're trying to reduce emissions. At the same time. We got to make sure we don't hurt our customers and our constituents. If we stay focused on that, then ingenuity and technology can develop and build and give us options going forward that may be better than anything we can imagine today.

John Eichberger (16:52):
It's when we start to confuse the solution with the cause that I think we can run down dark alleys and we get trapped. And once we get to that point, if we put all of our eggs in one basket and we get to a point where we go, "That basket's not going to serve everybody," then turning around and coming back is so much more difficult than if we actually kept the road open to these options forward.

Scott Shepard (17:14):
Yeah, certainly. I couldn't agree more. I think there needs to be a better baseline on how we approach the problem and maybe reorientation around that concept of what is the cause so we can provide a diversity of solutions and let the market decide.

John Eichberger (17:36):
And I think when you start talking about political lines, people line up behind different statements and different positions. If we are talking about reducing emissions, everybody can get behind that. And if we can define the objective in a way that makes sense, we can all support it, we can all work together to find a solution. And that's kind of what this paper was about. It's about opening up the mind to realize that we need to look at the market very specifically. We need to look at each sector and each segment, each duty cycle specifically because the solution for one may be very different than the solution for another. And I think the paper you guys put together for us really does that well. So I really appreciate you guys doing the work. We've worked with you guys on several projects and it's always been top notch. If people want to know a little bit more about what Guidehouse is working on, where can they go to get more information on your different projects?

Scott Shepard (18:22):
Yeah. As you said, we work on a lot of different projects in the transportation space. Our website is, and you'll see a lot of different links to the many different services we provide. In terms of research, we are spread a lot through clean tech, and emerging technologies and digitalization. So you'll be able to find our transportation research pretty easily. But yeah,

John Eichberger (18:55):
Thanks Scott, for joining us. For you guys back home, the report that Scott and I have been talking about should be coming out after the first of the year. Keep an eye on our social media channels, keep an eye on We'll be making quite a bit of noise when that thing's ready to go and hopefully we'll get it out after the first of the year. Scott, thank you for joining us on Carpool Chats. For everybody back home, we'll see you on the next episode. See you later.