There are many successful strategies to reduce fleet cost and emissions. EDF discusses many of these and provides case studies of leading companies that are cutting costs and setting environmental goals.
Fleet vehicles are driven hard, averaging nearly double the mileage, fuel consumption and emissions of personal vehicles. As a result, fleets are not only expensive to operate but are also a major source of global warming pollution. However, there are easy, cost-effective ways for fleets to “go green” and reduce their environmental impacts and operating costs at the same time. This guide presents a proven framework for greening your fleet. Fortune 500 companies, including Abbott, DuPont and Owens Corning have already implemented this framework and are reaping the benefits. The strategies presented here were created by a partnership between one of the world’s largest fleet management services providers, PHH Arval, and a leading national nonprofit organization, Environmental Defense Fund. In its first year, over a dozen companies and 60,000 vehicles benefited from the program.
Global warming is the rise of temperatures as a result of the buildup of Greenhouse Gases (GHGs) which trap and reflect heat from the Earth’s surface. Human activities, such as fossil fuel burning and forest clearing, have increasing the atmospheric concentrations of GHGs, causing temperatures to rise and natural climate systems to change. What happens will be determined largely by our actions. The best science says we need to reduce GHG concentrations at least 80% by 2050 in the United States. It will take a lot of work, but this goal is within reach if we start today. Where do these gas come from? 28% of US in transportation Of transportation, 61 Cars and Light Trucks; 20% medium and heavy duty When we focus on “greening,” we need to keep the focus on reducing these greenhouse gas emissions
The United States is responsible for about one quarter of the world’s GHG emissions, despite having 5% of the world’s population. Historically, the United States has been the largest global emitter. The largest source of U.S. emissions is utilities, but this is closely followed by the transportation sector with 27% of total GHG emissions. For information on the sources of greenhouse gases in the U.S, see www.epa.gov/climatechange/emissions/usinventoryreport.html
Vehicle use is a major contributor to global warming pollution. Passenger vehicles account for over sixty percent transportation emissions. Medium and Heavy duty vehicles account for another twenty percent. Corporate fleets clearly have an important part to play in reducing these emissions. Corporate fleets operate over 10 million cars and light trucks in the U.S. These fleet vehicles are driven an average of 23,000 miles per year – nearly double the mileage, fuel consumption, and corresponding emissions of personal vehicles. As a result, corporate fleets are major consumers of oil and gasoline, sources of air pollution, and contributors to climate change. However, there are opportunities for fleets to reduce these impacts now, while improving their bottom line. That’s what this project is intended to do
Vehicle emissions are the product of three key factors: driving practices, including miles traveled and idling; fuel economy; and the fuel carbon content.
Why Measure? Understand you current fleet impact “What gets measured gets managed” Enables the creation of a baseline and data-based goals Easy to track and report progress Transparent CO2 = 95% of vehicle emissions; others emissions are N20, CH4 and HCFCs Guidance and measuring and emission coefficients available from EPA climate leaders program
TREND: Move from 6cly to 4 cly overwhelming. 4 cl demand has doubled The most important environmental decision a fleet manager makes is which vehicles to have in the fleet. Relatively minor changes in vehicle selection can result in significant environmental—and financial—benefits over time. Consider the following strategies when choosing vehicles for your fleet. Right size—Analyze the operational needs of the fleet and eliminate excess vehicles. Match the duty requirements with the appropriate class and size vehicles. Special features, such as 4-wheel drive and 6- or 8-cylinder engines can increase costs and emissions. Choose “best in class”—Select vehicles with the highest fuel efficiency in their class that meet your organization’s price and performance needs. Evaluate total life cycle costs—Make vehicle selections based on costs over the full life of the vehicle, including acquisition, fuel consumption, depreciation and resale. Use incentives—Consider offering employees popular driver-paid options such as interior upgrades, sunroofs and satellite radio as incentives to select more cost-effective, efficient vehicles.
TREND: 2008 – ONE Company in US working with fleet drivers to reduce ghgs 2009 – TEN companies in US working with drivers; real results are being captured The way a vehicle is driven and maintained affects operating cost, fuel economy and greenhouse gas emissions. A few actions in this area can yield significant savings. Educate drivers—Teach your drivers how to be more efficient on the road and drive fewer miles. Speeding, coupled with rapid acceleration and deceleration, for instance, can significantly increase fuel consumption. Idling is another avoidable culprit—ten seconds of idling uses more fuel than re-starting the engine. Improve maintenance—Ramp up your vehicle maintenance program. Regular oil changes, proper tire inflation and other preventive maintenance practices increase fuel efficiency. A dirty air filter can reduce fuel efficiency by 10%, causing higher emissions. Incorporate technology—Take advantage of new technology, such as routing software, GPS systems and fuel management software to maximize efficiency. New telematics products allow for real time monitoring and data collection that can increase safety, reduce idling, cut fuel consumption and decrease emissions.
Of course, even after implementing a green fleet program, your fleet will still produce greenhouse gas emissions—though at reduced levels. However, by investing savings from lower operating costs in high quality carbon offset projects, you can effectively “zero-out” your fleet’s greenhouse gas impact. In most cases, the cost of the offsets will be a good deal lower than the fleet savings you earn. A carbon offset counterbalances the impact of a company’s greenhouse gas emissions by avoiding or storing an equal amount of pollution, often at another site. The idea is that for every ton of emissions “put into” the atmosphere, one ton is “taken out” elsewhere. Since climate change is a global problem, paying for an emission reduction that occurs anywhere in the world helps solve the problem. In essence, by investing in credible offset projects, companies can operate a fleet that has no net global warming impact. Follow these guidelines in purchasing offsets: Understand offsets and priorities—Prior to purchasing offsets, companies should understand how offsets work and how they can help support strategic business goals. Determine your purchase size—Calculate the greenhouse gas emissions for your fleet based on annual fuel usage. To make your fleet “climate neutral,” your offset purchase must be equivalent to your remaining carbon emissions. Review and evaluate available options—Offset quality is an important consideration. Because standards within the offset market are still developing, not all offsets have the same environmental value, which can complicate purchasing decisions. Until uniform standards are established, buy only from trusted suppliers who verify that their offsets meet rigorous criteria. The web site www.carbonoffsetlist.org contains a collections of offset project that meet the rigorous criteria of EDF for carbon offsets. Our criteria require: Emission reductions are achieved with sound methodologies and practices. All emission reduction claims are verified and verifiable by a third party. All emission reductions are permanent. If there is the potential for a reversal, in which emission reductions are returned to the atmosphere in the future, insurance must be maintained to protect against those scenarios. The carbon offset was generated in a way that produced net positive environmental and community impacts. Offsets are serialized and tracked so that they cannot be sold twice. We encourage companies that are considering carbon offsets to visit our list at carbonoffsetlist.org. All transactions initiated through carbonoffsetlist.org are exclusively between the retailer and the purchaser. Environmental Defense Fund does not receive any monetary compensation from these transactions or the featured retailers. The list has been organized alphabetically by project name.
TREND: ~ 50% of fleets report a environmental goal; EDF Benchmarking effort first ever in US. Now that you know you can track your fleet’s fuel use and emissions, share the information—including your successes—with employees, shareholders and the public. Data from your green fleet program can help fulfill reporting needs for your company in programs such as EPA Climate Leaders, the Carbon Disclosure Project and new carbon registries, that are of increasing interest to investors. Make sure your progress in reducing fleet emissions is mentioned in your company’s social responsibility or annual report. Rising energy costs and climate change are dual challenges facing businesses today. These challenges are particularly salient for corporate vehicle fleets. Uncertainties loom—from fluctuating fuel costs to future government regulations. At the same time, customers, shareholders and even employees are pressuring corporate leaders to help solve global environmental problems.
Setting an emission reduction goal for the fleet is a good way to provide a focus and demonstrate a long-term commitment to these efforts. When setting the goal, companies should consider the potential emission benefits of the strategies that are available to their fleet to improve fuel economy and reduce vehicle miles traveled. Based on this information, they should set an aggressive, but achievable reduction goal and timeline. The most environmentally responsible goals aim to achieve an absolute reduction in total fleet emissions. Total greenhouse gas emissions . – The total amount of emissions is the best measurement to assess overall environmental impact. Minimum data requirement : volume of fuel (by type) consumed. EDF-NAFA calculator can estimate non-carbon dioxide greenhouse gas emissions from this data. Unit : Metric tons. Greenhouse gases per miles traveled – Miles traveled is one of the leading factors determining vehicle emissions. It’s tough to compare the performance of units or peer entities that have different mileage patterns. This metric allows fleets to make a consideration for mileage, thus enabling comparisons between these groups. Derivatives of this metric include greenhouse gases per a specific mileage quantity (i.e. 100 miles or 10,000 miles) and emissions per kilometer. Minimum data requirement : total emissions and total miles. Unit: kilograms Greenhouse gases per vehicle – This metric represents the average performance of the unit or company-wide vehicles. It is influenced by factors including fuel source, miles travelled and fuel economy. Fleets willing to “deep dive” into their data can produce a similar, unit level metric that will help them track the performance of individual operators of same models and indentify what units contribute most to their overall footprint. Minimum data requirement : total emissions and number of vehicles for total fleet average. For a vehicle-specific number, unit-specific fuel consumption data is required. Unit : Metric tons Greenhouse gases per ton of freight moved – This is a cargo-based metric that quantifies the efficiency of moving goods. By using tons instead of pallets or cases, fleets will ensure that their metric is consistent internally and comparable externally. Minimum data requirement : total emissions and tons of freight moved. Unit : kilograms Cost per metric ton of greenhouse gases reduced – Different emission reduction strategies imply different costs. Some advanced technology vehicles require more capital up front. Driver training courses, routing software and telematics all typically have costs associated with them. Fleets can compare how they are doing in seeking the most cost-effective strategies for reducing emissions by collecting emissions and cost data. Minimum data requirement: Expenditure difference between emission reduction effort and baseline case. This should include both capital expenses (and savings) and operating savings. Total greenhouse gases reduced from baseline. Unit : U.S. dollars spent per metric ton of greenhouse gases reduced. Percentage of vehicles in the fleet that emit less than 15, 10 and 5 tons a year – The greenhouse gas per vehicle metric above is important to assess the average performance of fleets. However, for diverse fleets, it can fail to tell the full story. This metric aims to examine changes in the population of difference fleet segments. In 2008 the average fleet vehicle emitted 15.1 metric tons of greenhouse gases. Using this metric, fleets can see what percentage of their fleet performs better than the average fleet vehicle. By using further benchmarks, such as 5 and 10 tons, fleets can track the evolution of their fleets toward lower emission vehicles. Minimum data requirement : Vehicle specific fuel consumption. Unit : Metric tons Percentage of drivers that match or exceed EPA MPG combined rating – Passenger vehicles are tested by the U.S. EPA for fuel economy. Three numbers are available: city mileage, highway mileage and a combined average that assumes a 60/40 split of city and highway Greener World Media. State of Green Business 2009. Page 44. www.stateofgreenbusiness.com/
Abbott, one of the world’s leading health care companies, was the first to test drive this framework. To encourage its salespeople to switch to more fuel efficient vehicles, Abbott offered incentives such as satellite radios and sunroofs and educated drivers about the environmental impacts of their choices. In the first year of the program, about 20% of Abbott’s sales force has switched to more efficient vehicles. Fuel economy: 4.4% increase GHG emissions: 4.2% decrease Operating costs: 4.1% decrease
Infinity, a leading personal auto insurer, became the first company to operate a climate neutral fleet. It did so by replacing the Jeep Liberty with the Jeep Compass and offsetting the remainder of its emissions by investing in a project that reduces methane emissions on California dairy farms. Fuel economy: 22.0% increase GHG emissions: 13.0% decrease Operating Costs: 10.0% decrease
Owens Corning, a world leader in building materials systems and composite solutions, began implementing this framework. To date, the company has eliminated its least efficient vehicle, “right sized” trucks and SUVs, and incorporated more 4-cylinder vehicles to decrease costs and emissions. Fuel economy: 18.0% increase GHG emissions: 15.8% decrease Operating Costs: 8.0% decrease
The Co-operators, the leading Canadian-owned multiproduct insurance company, applied this framework as part of its sustainability plan. To reduce emissions, it set a new fuel economy requirement for fleet vehicles. The Co-operators also gave all drivers the option of selecting a hybrid vehicle and restricted the ordering of new trucks, vans and 8-cylinder vehicles. Fuel economy: 21.1% increase GHG emissions: 20.5% decrease Operating costs: No change
Saved $8.2 M in fuel costs Avoided over 22,000 metric tons of CO2 emissions, equivalent to taking more than 4,400 cars off the road Improved the efficiency of its fleet (gallons/ton of product moved) by over 4% compared to a 2007 baseline 2008 Results saved $1.2 M in fuel costs avoided over 3,000 metric tons of CO2 emissions, equivalent to taking more than 600 cars off the road improved the efficiency of its fleet (gallons/stop) by almost 9% compared to a 2007 baseline saved more than $4 M in material costs avoided 650 tons of solid waste, equivalent to more than 46 garbage trucks reduced scrap per bed (tons/unit) by 16% compared to a 2007 baseline &quot;As North America's No. 1 bedding manufacturer, it's imperative we take a strong leadership position in protecting and sustaining the environment. In light of the difficult environment for the mattress industry, we continue to make progress in the areas of our business we can control and the Green Portfolio Project further demonstrates Sealy's commitment to cost efficiency, as well as being environmentally responsible.&quot; – Larry Rogers, President and CEO, Sealy Abbott, one of the world’s leading health care companies, was the first to test drive this framework. To encourage its salespeople to switch to more fuel efficient vehicles, Abbott offered incentives such as satellite radios and sunroofs and educated drivers about the environmental impacts of their choices. In the first year of the program, about 20% of Abbott’s sales force has switched to more efficient vehicles. Fuel economy: 4.4% increase GHG emissions: 4.2% decrease Operating costs: 4.1% decrease Infinity, a leading personal auto insurer, became the first company to operate a climate neutral fleet. It did so by replacing the Jeep Liberty with the Jeep Compass and offsetting the remainder of its emissions by investing in a project that reduces methane emissions on California dairy farms. Fuel economy: 22.0% increase GHG emissions: 13.0% decrease Operating Costs: 10.0% decrease Owens Corning, a world leader in building materials systems and composite solutions, began implementing this framework. To date, the company has eliminated its least efficient vehicle, “right sized” trucks and SUVs, and incorporated more 4-cylinder vehicles to decrease costs and emissions. Fuel economy: 18.0% increase GHG emissions: 15.8% decrease Operating Costs: 8.0% decrease The Co-operators, the leading Canadian-owned multiproduct insurance company, applied this framework as part of its sustainability plan. To reduce emissions, it set a new fuel economy requirement for fleet vehicles. The Co-operators also gave all drivers the option of selecting a hybrid vehicle and restricted the ordering of new trucks, vans and 8-cylinder vehicles. Fuel economy: 21.1% increase GHG emissions: 20.5% decrease Operating costs: No change
Reducing Emissions from Corporate Fleets
Reducing Fleet Greenhouse Emissions Jason Mathers
What are the sources? U.S. greenhouse gas emissions
Why do vehicles matter? Source: EPA. 2007. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2005 (Draft for public review). The 100,000 vehicles in pharmaceutical fleets emit about 900,000 MT CO 2 each year!
Factors for vehicle emissions Total carbon emissions Driving Practices Carbon per gallon of fuel Fuel economy
Measure Emissions <ul><li>Gallon of Diesel = 10.15 kg CO 2 </li></ul>Total Carbon Dioxide Gallons of Gasoline CO 2 coefficient = C O O X 8.81 kg
Improve Vehicle Selection <ul><li>Right size vehicles </li></ul><ul><li>Choose best in class </li></ul><ul><li>Evaluate total vehicle life-cycle costs </li></ul><ul><li>Offer employee incentives </li></ul>
Improve Vehicle Use <ul><li>Influence driver behavior </li></ul><ul><li>Deploy telematics </li></ul><ul><li>Reduce Vehicles Miles Travel </li></ul><ul><li>Improve vehicle maintenance </li></ul>
IV. Offset Remaining Emissions <ul><li>Leadership Practice </li></ul><ul><li>Portion of Savings can cover costs </li></ul><ul><li>Credible projects a must </li></ul>