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How to Orchestrate a Leveraged Green-up: Vehicle Fleets

RP Siegel | Thursday February 4th, 2010 | 2 Comments

Leverage is a term we have come to associate with high-risk investment strategies that operate primarily with borrowed funds. The leverage comes from the potential multiplication of the investor’s relatively small cash outlay. But the term can also be applied to the multiplier effects that accompany the economies of scale.

A recent video produced by the Environmental Defense Fund, demonstrates the leverage that a few simple actions directed at improving vehicle efficiency can have when applied to a company’s vehicle fleet, both in terms of emissions reductions as well as in cost savings.

Given the more than three million fleet vehicles on the road today, and the fact that a typical fleet vehicle emits roughly twice the amount of carbon as a personal use vehicle, the application of a few simple, and very low cost tips can add up to savings of over $2 billion.

These tips include:
•    Choosing a smaller/more efficient fleet car
•    Picking a more efficient route for work calls
•    Regularly checking tire pressure
•    Reducing idling
•    Removing excess cargo from the trunk

According to the film, there are more than three million fleet cars on the road, which rack up roughly 45 million metric tons of CO2 annually. Following EDF’s tips would eliminate six million of those metric tons, which is equivalent to taking 400,000 of those cars off the road.  (Of course, there is no reason those same tips could not be applied to personal vehicles as well, of which there are now a total of 246 million– a number which declined for the first time last year.) The  EDF website provides a five step framework for fleet reductions. These steps are: Measure baseline & set goals, Select the right size vehicles, Improve vehicle use through training, maintenance, etc., Offset emissions to achieve carbon neutrality, and Report the results.

There seems to be plenty of unpicked low hanging fruit remaining here. According to EDF’s benchmarking survey on the topic,  only 30% of the 300 companies reporting (with an annual average of 7.6 million fleet miles each) said that fleet management was among their top environmental priorities or had set a specific fleet GHG reduction goal.

Of course, for companies willing to dig a little deeper, there are even more savings possible. Walmart, for example, asked the Rocky Mountain Institute to help it assess the effectiveness of numerous suggestions for improving the efficiency of its long haul fleet. The trucks drive approximately 900 million miles a year at approximately six miles per gallon. This effort is part of the mega-retailer’s plan to double the efficiency of its fleet by 2015. Annual savings of $500 million per year are projected by 2020. Some of the improvements selected include: refined aerodynamics, lower rolling resistance tires, and the installation of auxiliary power units (APU), which allow the cabs to remain heated or cooled without idling the engine. The use of APUs alone is estimated to eliminate approximately 100,000 metric tons of CO2 emissions, reduce diesel fuel consumption by 10 million gallons, and save the company an estimated $25 million per year.

If that weren’t enough impact reduction from fleets, an IBM white paper on the future of the trucking industry suggests that a fleet of plug-in hybrid electric trucks, with their massive collective storage capacity, could play a major role in leveling out the variability of a renewable power grid.

(We’re proud to have EDF and its Fund Innovation Exchange as a Triple Pundit site sponsor.)


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