Through their control over transport and logistics operations, companies have the power to make deep cuts in greenhouse gas emissions, but business leaders are being wary as they select from a wide array of alternative fuels and technologies.

Big retail, communications and package delivery companies use an enormous amount of fuel to power their own fleets and indirectly through their suppliers. According to the Department of Energy, medium- and heavy-duty trucks consume 16 percent of energy used by all modes of transportation. Overall, energy consumption in the trucking sector is expected to continue growing as the U.S. economy expands.

In this context, switching from high-cost diesel to a low-carbon alternative fuel isn't just the green thing to do; it's key to ensuring consumer products stay at affordable prices, Elizabeth Fretheim, director of business strategy and sustainability logistics at Wal-Mart Stores Inc., explained at a symposium last week hosted by the nonprofit group Business for Social Responsibility (BSR).

But there are a number of complexities related to the viability of a new fuel, Fretheim added, such as the vehicle payback period, the need for new infrastructure, overcoming maintenance issues and sourcing enough of an alternative fuel to test it and to fully adopt it if it works. There are concerns that a company will make big investments in a fuel or technology that's eventually pushed out of the market.

Picking an alternative fuel is like entering the VHS versus Betamax battle, "but supersized," said Fretheim. "We're very concerned about making the wrong switch -- buying the VHS when the Beta is the winner. So it's obviously something we're moving very slowly with."

Wal-Mart tested biofuels in its fleet made from the grease produced at its own stores but found the fuel did not work well in its new truck engines. The company also started a pilot with biofuel maker Dynamic Fuels, but limited fuel supply forced it to put the project on hold. Wal-Mart is currently testing a handful of trucks running on liquefied natural gas (LNG).

UPS tries liquefied natural gas
For United Parcel Service Inc., which has experimented with a wide range of alternative fuels across its fleet, LNG for long-haul trucks has been the clear standout, said Steve Leffin, director of global sustainability at UPS.

The domestically produced fuel is cheaper and cleaner than diesel and offers broader national security benefits, he said. Accessing infrastructure is a manageable issue, since UPS trucks refuel at the same hubs. LNG is also available for purchase from municipalities that use natural gas for heating homes, which alleviates concerns about fuel supply, said Leffin.

UPS is "very aggressive" on LNG, he said. This year, the company purchased 700 LNG trucks, bringing its total to 1,000.

But unknowns with respect to the life-cycle benefits of a given fuel are still a big concern for UPS. "We don't want to have companies spending capital and politicians making policies with unintended consequences," Leffin said.

The carbon footprint of an electric vehicle, for instance, varies drastically based on location and the energy mix. So depending on the route that vehicle runs, the fuel may make more or less economic and environmental sense. There are also outstanding questions related to the real-world efficiency gains of natural gas fuels and the life-cycle emissions they produce based on methane leakage in the production process.

"There will be greater investment [in alternatives] if there's greater confidence that a technology or fuel will not do more harm than good to the planet," Leffin said.

Volvo likes dimethyl ether
In transportation, often the easiest way to boost fuel economy and reduce emissions is to avoid fuel-burn altogether.

By applying information technology systems, for instance, UPS has found ways to package trucks more efficiently to reduce idling time. Through telematics, UPS can also monitor a truck's travel route and how it's being driven to promote best practices among drivers.

Lightweighting and aerodynamics can also play a significant role. For long-haul trucks, applying lightweight materials such as aluminum and carbon composites could reduce fuel consumption by up to 5 percent. Improving the aerodynamics of a tractor-trailer with devices like side skirts could reduce fuel consumption by up to 12 percent.

"The single most exciting thing is coupling the aerodynamics of the tractor and the trailer," said Anthony Greszler, vice president of government and industry relations for Volvo Trucks. But since engines and cargo containers are manufactured separately, there needs to be greater standardization in order to reap the greatest benefit, he said.

Volvo, a leader in manufacturing truck engines, sees another big opportunity in making trucks that run on dimethyl ether, or DME. The colorless, odorless gas has physical characteristics similar to propane and can be chemically derived from natural gas or renewable feedstocks like landfill gas.

"It's a clean-burning fuel, made from multiple feedstocks. So in addition to using our naturally abundant natural gas in the U.S., we can also use a multitude of wasted resources that have no home today," said Rebecca Boudreaux, president of Oberon Fuels, on the sidelines of a Capitol Hill briefing on DME last week. "Methane and carbon dioxide that is going into the atmosphere instead creates something that's clean-burning."

Volvo has committed to making commercially available trucks that run on DME by 2015. Mack Trucks has also announced plans to sell DME engines. But trucking companies will likely be hesitant to embrace a fuel with a limited track history and about half the energy density of diesel.

Electricity could spark savings in delivery trucks
John Boesel, president and CEO of the clean transportation consortium CALSTART, said at the BSR event that he's confident there are also some attractive applications for electric platforms in the trucking sector. Vocational trucks that frequently start and stop, such as refuse and package trucks, stand to see significant fuel savings thanks to regenerative braking.

High and volatile diesel prices will drive companies like UPS and Wal-Mart to further explore various fuel-saving technologies and low-carbon alternatives. More and more alternatives will also work their way onto U.S. roads due to increasingly stringent U.S. EPA and National Highway Traffic Safety Administration standards.

In 2011, the agencies completed the first phase of heavy-duty vehicle regulations to run from 2014 through 2018, which will largely incentivize the use of known technologies to produce a 15 percent fleetwide fuel efficiency improvement. In the administration's new climate policy unveiled this summer, President Obama committed to a second phase of regulations for the post-2018 time frame.

Stakeholders have just begun designing the rules, but undoubtedly a debate will emerge over how different alternative fuels and technologies are incentivized, said Therese Langer, transportation program director at the American Council for an Energy-Efficient Economy (ACEEE).

In a report published last week, ACEEE found that the adoption of various fuel-saving technologies could reduce the fuel consumption of heavy-duty vehicles by 26 percent in 2035 beyond the benefits expected from fuel economy standards already in place.

At the BSR symposium, Austin Brown, senior analyst at the National Renewable Energy Laboratory, underscored that today there are unprecedented opportunities to advance clean technologies in transportation. While the frequency of extreme events is increasing, in combating climate change "there's this feeling that we have options we didn't have before," he said.

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC., 202-628-6500