Alternative Fuel Vehicles

Decision on alternative-fuel vehicles is one of the most important problems for fleet operations. In the European Union, transport is the largest consumer of oil products and the second-largest emitter of carbon dioxide (CO2); within the sector, road transport dominates in both regards. To reduce oil dependency and to make transport more sustainable, the European Commission set out the target to replace 10% of conventional transport fuels with renewable alternatives, such as biofuel, hydrogen, and green electricity, by the year 2020 (European Union, 2009). The lack of a widespread service station network for alternative fuels may constitute a barrier to the adoption of alternative-fuel vehicles. Alternative-fuel vehicles have potential in high-tax vehicle markets.

Nevertheless, the demand for AFVs is still relatively small. One of the reasons is the lack of investment in infrastructure for recharging/refueling these vehicles. The number of establishments for refueling EVs and fuel cell vehicles (FCVs) is insufficient. However, a few attempts have been made to resolve this problem. The adoption of alternative fuel vehicles (AFVs) has been regarded as one of the most important strategies to address the issues of energy dependence, air quality, and, more recently, climate change. Despite decades of effort, we still face daunting challenges to promote wider acceptance of AFVs by the general public. Using a choice model, we estimate the preferences for alternative fuel vehicles by Dutch local governments. The analysis shows that local governments are willing to pay between 25% and 50% extra for an alternative fuel vehicle without a serious loss of utility.