Alternative fuels initiatives

Evidence Rating  
Evidence rating: Expert Opinion

Strategies with this rating are recommended by credible, impartial experts but have limited research documenting effects; further research, often with stronger designs, is needed to confirm effects.

Health Factors  
Date last updated

Alternative fuels initiatives support transition from traditional motor fuel sources (i.e., gasoline and diesel) to alternative sources such as biodiesel, ethanol, compressed natural gas, partial electric, hydrogen fuel cells, or liquid petroleum gas. Such initiatives support the supply, distribution, and production of alternative fuels and vehicles through various combinations of financial incentives (e.g., tax benefits, loans, grants, or rebates), mandates or rules (e.g., consumption targets or renewable fuel standards), direct purchases of alternative fuel vehicles for use in state or municipal fleets, and investments in research and development to improve technology and to evaluate and improve the infrastructure for alternative fuel vehicles. Initiatives are underway in many areas around the country to reduce potential barriers to the adoption of alternative fuels, such as high costs and a lack of supporting infrastructure1, 2.

What could this strategy improve?

Expected Benefits

Our evidence rating is based on the likelihood of achieving these outcomes:

  • Reduced emissions

What does the research say about effectiveness?

Alternative fuels initiatives are a suggested strategy to reduce emissions1, 2, 3, 4, 5. Available evidence suggests that using alternative fuels decreases emissions of greenhouse gases (GHGs) and volatile organic compounds (VOCs)1, 6, 7, 8, and that alternative fuel sources such as compressed natural gas, methanol, ethanol, or electricity produce significantly less air toxics emissions than conventional gasoline9.

Pollutant levels and emissions reductions vary for each type of alternative fuel10 and geographic regions have varying exposure levels to emissions and particulate matter11. Understanding local context can support decisions about the most appropriate alternative fuels initiatives; there is not a one-size-fits-all approach for these initiatives or incentives1, 12. Additional evidence is needed to determine the costs and effects of various initiatives promoting each alternative fuel.

Survey research suggests financial incentives such as subsidies or grants supporting alternative fuels have greater public support than regulations such as increased fossil fuel taxes or bans on new fossil fuel vehicle sales13. One study suggests alternative fuel vehicle (AFV) adoption is more likely when neighbors have an AFV14. Experts suggest that interest and investment in alternative fuel technologies has oscillated over time at least partially due to the complex interplay between policies on local, national, and international levels, and large car firms’ strategies15.

Electric and hydrogen fuel cell vehicles do not produce tailpipe emissions; overall GHG emissions from electric vehicle use depend on the local fuel source used to generate electricity. Reports suggest electric-drive vehicles based on batteries, plug-in hybrids, and fuel-cell technology greatly reduce or eliminate direct use of oil in transportation, and in most cases and settings significantly reduce GHG emissions compared to conventional vehicles. Electric-drive vehicles have higher initial costs, lower fuel costs, may have lower maintenance and repair costs, and in some cases can have higher insurance costs than conventional gasoline vehicles16. A Japan-based study suggests shifting to mini-sized electric vehicles would significantly reduce GHG emissions, energy and material consumption, and cost; downsizing transportation fleets could achieve similar benefits in other developed countries17. Experts suggest government policies can support emerging markets, motivate manufacturers, facilitate electric vehicle ownership and use, increase public confidence, and improve electric vehicle charging regulations16.

Case studies in California, Kentucky, and Massachusetts suggest many factors influence whether transit agencies decide to fully adopt an electric bus fleet after implementing pilot programs. In many cases, total cost analysis suggests electric buses are more cost-effective than diesel buses; however, costs are sensitive to widely varying supporting policies, annual fleet mileage, fossil fuel costs, and electricity tariffs. In California, supportive policies are in place and many local agencies report plans to fully adopt electric fleets; however, outside of California, agencies suggest the high initial cost of electric buses, oversubscribed grant programs, charging infrastructure and electricity costs, and additional operational complexity remain as barriers to fully adopting electric bus fleets18.

A California-based model suggests renewable natural gas can be encouraged through policies that develop renewable fuel and carbon pollution credit markets, offer incentives for fleets to shift to sustainable fuel trucks, and reduce connection costs for in-state renewable natural gas19. Vehicles using biofuels produce fewer GHGs than those using conventional gasoline when operating; however, analyses suggest some biofuels, especially corn ethanol, may not decrease overall GHG emissions when considering other environmental costs. For example, government support can encourage farming on previously unfarmed lands, including wetlands and forests, and corn monoculture farming typically requires lots of fertilizer, pesticides, irrigation, and energy intensive practices20, 21, 22. Some government policies support traditional corn ethanol more than other biofuel alternatives, which can reduce the cost of corn ethanol for consumers more than costs for advanced biofuels or hydrogen fuel21, 22. Experts also suggest subsidies for biofuels increase supply, increasing total fuel supplies and decreasing fuel prices, which may create a market rebound effect, enabling more fuel use and increasing overall GHG emissions21, 22, 23.

Policymakers often support fuel standards to decrease emissions and increase development of renewable energy technologies, although there is limited evidence demonstrating how successfully such policies influence innovation24. Available evidence suggests fuel standards may be less effective by themselves than policies directly affecting fuel price; however, policymakers can increase the efficiency of such policies by also including cost containment provisions that limit price volatility and increase economic efficiency of fuel standards at all levels25. One study suggests state policies such as California’s Low Carbon Fuel Standard (LCFS) may increase the effectiveness of national policies such as the Renewable Fuel Standard26. Other studies suggest that overall social welfare increases more with a carbon tax than with state or national fuel standards due to efficiency costs27.

Implementation Examples

As of February 2020, the National Conference for State Legislatures’ transportation funding and finance state bill tracking database has recorded 30 states that have enacted 87 bills addressing alternative fuels or electric vehicle initiatives28. The U.S. Department of Energy (U.S. DOE) also provides a searchable database of federal and state laws and incentives for alternative fuels1.

The U.S. Environmental Protection Agency (EPA) provides information and resources about converting vehicles to alternative fuels as well as an alternative fuel station locator29. The U.S. DOE website also includes an alternative fuel station locator and a vehicle cost calculator that compares life cycle emissions for individual vehicle models, accounting for the local context1.

The Clean Cities Coalition, facilitated by the U.S. DOE’s Vehicle Technologies Office (VTO) within the Office of Energy Efficiency and Renewable Energy, is a national network of nearly 100 local coalitions that support local alternative fuels initiatives and advance affordable, domestic transportation fuels, energy efficient mobility systems, and other fuel-saving technologies and practices30.

Implementation Resources

NREL-Fleet - National Renewable Energy Laboratory (NREL). Fleet management.

US DOE-AFDC - U.S. Department of Energy (U.S. DOE). Alternative Fuels Data Center (AFDC).

CEC-CTP - California Energy Commission (CEC). Clean transportation program (CTP) or Alternative and renewable fuel & vehicle technology program (RFVTP).

DSIRE - North Carolina Clean Energy Technology Center, U.S. Department of Energy (U.S. DOE). Database of state incentives for renewables & efficiency (DSIRE).

NCSL-AF tools 2015 - National Conference of State Legislatures (NCSL). Alternative fuel (AF) tools for state decision-makers: Archived webinar. 2015.


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1 US DOE-AFDC - U.S. Department of Energy (U.S. DOE). Alternative Fuels Data Center (AFDC).

2 Rahm 2006 - Rahm D, Coggburn JD. Environmentally preferable procurement: Greening U.S. state government fleets. International Public Procurement Conference Proceedings; 2006.

3 US EPA-Alternative fuels - U.S. Environmental Protection Agency (U.S. EPA). Fuels and fuel additives: Renewable and alternative fuels.

4 NGA-Green vehicle guide 2008 - National Governors Association (NGA). Securing a clean energy future: Greener fuels, greener vehicles: A state resource guide. 2008.

5 Lutsey 2008 - Lutsey N, Sperling D. America’s bottom-up climate change mitigation policy. Energy Policy. 2008;36(2):673-85.

6 Hill 2006 - Hill J, Nelson E, Tilman D, Polasky S, Tiffany D. Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels. Proceedings of the National Academy of Science. 2006;103(30):11206-10.

7 CTR-Wang 1998 - Wang MQ. Fuel-cycle greenhouse gas emissions impacts of alternative transportation fuels and advanced vehicle technologies. Argonne: Center for Transportation Research (CTR); 1998.

8 US DOT-Alternative fuels strategies - U.S. Department of Transportation (U.S. DOT). Fuels and vehicle technology: Alternative fuels strategies.

9 CTR-Winebrake 2000 - Winebrake J, He D, Wang M. Fuel-cycle emissions for conventional and alternative fuel vehicles: An assessment of air toxics. Argonne: Center for Transportation Research (CTR); 2000.

10 US DOE-AFV Emissions - U.S. Department of Energy (U.S. DOE), Energy Efficiency & Renewable Energy (EERE). Alternative fuels data center: Alternative fuel vehicle (AFV) emissions.

11 US EPA-Air toxics - U.S. Environmental Protection Agency (U.S. EPA). Technology transfer network air toxics web site: National air toxics assessments.

12 NREL-Fleet - National Renewable Energy Laboratory (NREL). Fleet management.

13 Rinscheid 2020 - Rinscheid A, Pianta S, Weber EU. Fast track or Slo-Mo? Public support and temporal preferences for phasing out fossil fuel cars in the United States. Climate Policy. 2020;20(1):30-45.

14 Jansson 2017 - Jansson J, Pettersson T, Mannberg A, Brännlund R, Lindgren U. Adoption of alternative fuel vehicles: Influence from neighbors, family and coworkers. Transportation Research Part D: Transport and Environment. 2017;54:61-73.

15 Bohnsack 2015 - Bohnsack R, Kolk A, Pinkse J. Catching recurring waves: Low-emission vehicles, international policy developments and firm innovation strategies. Technological Forecasting and Social Change. 2015;98:71-87.

16 Delucchi 2014 - Delucchi MA, Yang C, Burke AF, et al. An assessment of electric vehicles: Technology, infrastructure requirements, greenhouse-gas emissions, petroleum use, material use, lifetime cost, consumer acceptance and policy initiatives. Philosophical Transactions of the Royal Society. 2014;372.

17 Gonzalez Palencia 2016 - González Palencia JC, Araki M, Shiga S. Energy, environmental and economic impact of mini-sized and zero-emission vehicle diffusion on a light-duty vehicle fleet. Applied Energy. 2016;181:96-109.

18 Blynn 2019 - Blynn K, Attanucci J. Accelerating bus electrification: A mixed methods analysis of barriers and drivers to scaling transit fleet electrification. Transportation Research Record. 2019;2673(8):577-587.

19 Scheitrum 2017 - Scheitrum D, Myers Jaffe A, Dominguez-Faus R, Parker N. California low carbon fuel policies and natural gas fueling infrastructure: Synergies and challenges to expanding the use of RNG in transportation. Energy Policy. 2017;110:355-364.

20 DeCicco 2016 - DeCicco JM, Liu DY, Heo J, et al. Carbon balance effects of U.S. biofuel production and use. Climatic Change. 2016;138(3-4):667-680.

21 CPF-Ethanol 2019 - Engebretson A, Diamond JW. Evaluating the economic impacts of the Renewable Fuel Standards (RFS) and the ethanol quantity mandate. Rice University’s Baker Institute for Public Policy, Center for Public Finance; 2019.

22 CGO USU 2018 - Wardle AR. A review of the environmental effects of the Renewable Fuel Standard’s corn ethanol mandate. The Center for Growth and Opportunity at Utah State University; 2018.

23 Hill 2016 - Hill J, Tajibaeva L, Polasky S. Climate consequences of low-carbon fuels: The United States Renewable Fuel Standard. Energy Policy. 2016;97:351-353.

24 Lade 2015 - Lade GE, Lawell C. The design and economics of low carbon fuel standards. Research in Transportation Economics. 2015;52:91-99.

25 NCST-Lade 2015 - Lade GE, Lawell C-Y. Mandating green: On the design of renewable fuel policies and cost containment mechanisms. UC Davis: National Center for Sustainable Transportation; 2015.

26 Whistance 2017 - Whistance J, Thompson W, Meyer S. Interactions between California’s Low Carbon Fuel Standard and the National Renewable Fuel Standard. Energy Policy. 2017;101:447-455.

27 Chen 2014a - Chen X, Huang H, Khanna M, Önal H. Alternative transportation fuel standards: Welfare effects and climate benefits. Journal of Environmental Economics and Management. 2014;67(3):241-257.

28 NCSL-Alternative fuels - National Conference of State Legislatures (NCSL). Transportation funding and finance state bill tracking database: Alternative fuels and electric vehicles.

29 US EPA-Fuel conversion - U.S. Environmental Protection Agency (U.S. EPA). Information for consumers about alternative fuel conversions.

30 US DOE-Clean Cities - U.S. Department of Energy (U.S. DOE), Department of Energy Efficiency & Renewable Energy. Clean Cities Coalition Network.