Energy Policy Act of 1992 – Fleet Program

To stimulate demand for alternative fuels, the Energy Policy Act (EPAct) of 1992 (P.L. 102–486), 42 USC 13211 et. seq., required fleets operated by the federal government, state governments, and fuel providers to acquire alternative fueled vehicles (AFVs). The AFV acquisition requirements apply to light-duty (i.e., ≤ 8,500 lbs. GVWR) fleet vehicles located in the largest metropolitan areas and exclude emergency, law enforcement, and take home vehicles. The fleet programs initially were very effective in encouraging the acquisition and use of natural gas vehicles (NGVs). However, the benefits of these programs for NGVs have declined over the years. Key provisions in EPAct have been watered down while others were never implemented (e.g., private fleet rule). Two key changes that have damped demand for NGVs include the 1998 amendment by Congress allowing fleets to satisfy up to 50 percent of their requirements by using biodiesel blends and the 2008 amendment allowing federal fleets to count hybrid electric vehicles and lean-burn (diesel) vehicles as AFVs. These provisions have reduced demand for true alternative fueled vehicles.

In addition to the fleet provisions, EPAct 1992 also provided authority for a number of other initiatives that are important to the NGV industry. It authorized funding for natural gas engine research, early school bus demonstration programs (now implemented by EPA), educational and training programs, and the Clean Cities Program.

Federal Fleet Program 
The first fleets to acquire AFVs under EPAct 1992 were those operated by the federal government. Starting in 1993, federal fleets were required to purchase a specific number of AFVs, then annually phase-in an increasingly larger percentage of AFVs. Since fiscal year (FY) 1999, federal fleets have been required to purchase AFVs to meet at least 75 percent of total vehicle acquisitions. Covered federal fleets are those located in metropolitan statistical areas that operate at least 20 light-duty vehicles (LDVs) that are centrally fueled or are capable of being centrally fueled. Various vehicles are exempt from fleets’ LDV count and fuel use requirements, such as emergency, law enforcement, and non-road vehicles.

Legislation has been passed and a number of Executive Orders (E.O.) have been issued that amended EPAct 1992. These changes both provide greater guidance and modify the requirements for federal agencies with respect to AFV acquisitions. Brief summaries of these changes are outlined below.

E.O. 13031 (1996) modified the federal fleet AFV acquisition requirements to allow fleets to earn multiple credits for medium- and heavy-duty AFVs, as well as dedicated AFVs.

Energy Conservation Reauthorization Act (ECRA) of 1998 granted federal fleets the ability to earn credits by displacing petroleum fuel with biodiesel and biodiesel blends. Every 450 gallons of pure biodiesel—or 2,250 gallons of B20—used in diesel vehicles earns one credit. Credits earned in this way can satisfy up to 50 percent of vehicle acquisition requirements for federal fleets.

EPAct Credit Structure*
Credits Awarded
Vehicle Type, Fuel Use
Dual-fuel (flexible or bi-fuel) vehicles, regardless of vehicle size class
Dedicated light-duty AFVs
Dedicated medium-duty AFVs
Dedicated heavy-duty AFVs
Every 450 gallons of pure biodiesel (2,250 gallons of B20) used in diesel vehicles. Caps at 50 percent of EPAct requirements.

Chart modified from the Department of Energy (DOE) and Federal Energy Management Program (FEMP).

E.O. 13149 (2000) established a 20 percent petroleum reduction goal for federal agency fleets with 20 or more vehicles, and it requires the acquisition of more fuel efficient vehicles. This E.O. also included additional reporting requirements and managerial responsibilities in an effort to hold government agencies more accountable with respect to their AFV obligations.

The Energy Policy Act of 2005 (EPAct 2005), section 701, requires dual-fueled vehicles to operate on alternative fuels. This amendment came as a response to fleets operating their dual-fueled vehicles—which count toward AFV acquisition requirements—on petroleum fuels, negating the program’s purpose of reducing the use of imported petroleum fuels.

E.O. 13423 (2007) requires federal fleets with 20 or more vehicles to reduce petroleum use by 2 percent each year using the amount of fuel used in FY 2005 as a baseline. Covered fleets must also increase alternative fuel use by 10 percent each year. This executive order also covers the use of plug-in hybrids.

E.O. 13514 (2009) requires fleets to set greenhouse gas (GHG) reduction goals for FY 2020 and submit annual progress reports. Fleets are required to reduce petroleum fuel use by 2 percent annually through FY 2020 relative to a baseline set in FY 2005. Reduction strategies include acquiring AFVs and using low-carbon alternative fuels.

Presidential Memorandum (May 2011) was issued by President Obama that requires all new light-duty vehicles leased or purchased by agencies must be alternative fueled vehicles by December 31, 2015. This includes requiring the purchase of hybrid or electric, compressed natural gas, or biofuel vehicles. It also directs that, as soon as practicable, federal agency vehicles shall be located in proximity to fueling stations with available alternative fuels and be operated on the alternative fuel for which the vehicle is designed. Where practicable, agencies should encourage the development of commercial infrastructure for alternative fuels or provide flex fuel and alternative fuel pumps and charging stations at federal fueling sites.

As a result of these requirements, the federal government now operates a fleet of more than 177,000 AFVs. According to the last annual report available (2010) from DOE’s Federal Automotive Statistical Tool (FAST), the federal government currently operates 5,671 NGVs. However, this figure is down from a high of 17,536 NGVs in 2001, a figure that made up 30 percent of federal fleet vehicles. In the last ten years, flexible fueled vehicles (FFVs) have grown to comprise 89 percent of federal fleet vehicles, and hybrid-electric vehicles (HEVs) have grown to comprise nearly 6 percent of federal fleet vehicles. This trend, however, may begin to reverse in the future as more NGVs become available and the significant economic savings provided by NGVs become evident. Also, the increasing pressure on federal agencies to actually use alternative fuels in their AFVs should be an additional incentive for agencies to switch to NGVs as other alternative fuels are more expensive.

State and Alternative Fuel Provider Program
The State Fuel Provider (SFP) Program also established AFV acquisition requirements for companies in the business of providing alternative fuels to state government fleets. These provisions are set out in section 501 and 507(o) of EPAct 1992. Because of the similarities of the requirements for these two types of fleets, DOE combined them in one program under the Alternative Fuel Transportation Program, 10 CFR Part 490. The requirements apply to fleets that own or operate at least 50 non-exempt light-duty vehicles of which at least 20 are centrally fueled or capable of being centrally fueled. Exempt vehicles include take home vehicles, emergency or law enforcement vehicles, vehicles used to restore electrical operation in emergencies, and non-road vehicles.

The purchase requirements for SFP fleets were phased-in beginning model year (MY) 1997. The purchase requirements currently require that 75 percent of newly acquired state government light-duty vehicles must be AFVs and 90 percent of newly acquired alternative fuel provider vehicles must be AFVs. As noted above, covered fleets also have the option of using biodiesel blends to satisfy up to 50 percent of their AFV acquisition requirements. Based on DOE’s latest report for this program (2010), the combined annual requirement for SFP fleets is around 5,000 AFVs. Covered fleets actually purchased more than 10,000 AFVs, which means that many fleets actually exceeded their purchase requirements. Under the program, fleets that exceed their requirements earn credits that can be banked or sold to other covered fleets.

In past years, the SFP program generated significant demand for NGVs. However, in recent years most fleets have relied on flexible fueled vehicles to satisfy their purchase requirements. State fleets are not actually required by this program to use alternative fuels. Many fleets acquire FFVs to satisfy program requirements but continue to operate these vehicles on petroleum fuels. For 2010, DOE reported that flexible fueled E85 vehicles accounted for 94 percent of the AFVs acquired. NGVAmerica believes that this trend could change as more light-duty NGVs become available and state governments become more proactive in pursuing NGVs. More than 20 state purchasing authorities have now signed on to a new NGV procurement effort undertaken by Oklahoma and Colorado and other state governors. This effort recently issued a state RFP for NGVs that is likely to result in the purchase of thousands of NGVs by state authorities.

Standard Compliance
Standard compliance is what was originally outlined in EPAct 1992. SFP fleets are in standard compliance when they satisfy the AFV acquisition requirements for the given model year. Using biodiesel for up to 50 percent of their acquisition requirements counts toward standard compliance. Fleets that exceed standard compliance by purchasing more AFVs generate surplus credits that can be sold to alternative compliance fleets or banked to satisfy acquisition requirements in future years.

Alternative Compliance
Alternative compliance is for fleets that are unable to meet their acquisition requirements. Failure to comply might be due to the inability to access alternative fuels. Fleets unable to comply must obtain a waiver from standard compliance, and then purchase enough credits to satisfy their AFV acquisition and fuel use requirements. NGVAmerica submitted comments on the proposed rule.

To learn more about the State and Alternative Fuel Provider Program, contact the regulatory manager at (202) 586-9171 or email

Private and Local Government Fleets 
DOE’s regulations do not currently require private or local government fleets to acquire AFVs or replace their petroleum fuel use with alternative fuels. Section 507 of EPAct 1992 provided DOE with discretionary authority to require private and local government fleets to acquire AFVs. However, this authority was conditioned on various findings concerning the degree to which such fleets would contribute to the achievement of the petroleum fuel replacement goals contained in EPAct 1992—originally 10 percent by 2000 and 30 percent by 2010. The DOE has since revised the original replacement fuel goal to 30 percent by 2030. In March 2008, DOE published its final rule for not regulating the purchase of AFVs in private and local government fleets. DOE determined the number of fleets covered, the number of AFVs likely purchased, and the amount of fuel likely displaced would provide a negligible contribution toward the revised petroleum fuel replacement goal. For more information on this issue, click here.