FreedomCAR and Vehicle Technologies Program – Energy Policy Act (EPAct)

EPAct Alternative Fuels

• Methanol, ethanol, and other alcohols
• Blends of 85% or more of alcohol with gasoline
• Natural gas and liquid fuels domestically produced from natural gas
• Liquefied petroleum gas (propane)
• Coal-derived liquid fuels
• Hydrogen
• Electricity
• Biodiesel (B100)*
• Fuels (other than alcohol) derived from biological materials
• P-Series

* In January 2001, the Biodiesel Final Rule made it possible for fleets to earn EPAct credits for use of biodiesel blends of at least 20%. This rule does not make B20 (a 20% blend of biodiesel with diesel) an alternative fuel, but gives one credit for every 450 gallons of pure biodiesel used in biodiesel blends.

Federal Fleet Requirements

The Energy Policy Act (EPAct) set forth the statutory requirements for the acquisition of alternative fuel vehicles (AFVs) by Federal agencies. In fiscal year (FY) 2000 and beyond, 75% of light-duty vehicle (LDV) acquisitions in covered fleets must be AFVs. Vehicles that weigh less than 8,500 lb gross vehicle weight rating (GVWR) are considered LDVs. Signed in April 2000, Executive Order (E.O.) 13149 directs Federal agencies to reduce petroleum consumption by 20% in their fleets. In addition E.O. 13149 requires the use of alternative fuels in AFVs. The Executive Order reinforces EPAct.

Through a combination of AFV acquisitions, increased alternative fuel use in AFVs, improved efficiency in non-AFV acquisitions, and improvements in overall fleet operating efficiencies, agencies are required to decrease the annual petroleum consumption of Federal fleets by 20% by 2005 compared with 1999 consumption. E.O. 13149 further strengthens reporting requirements and requires each agency to designate a senior-level official responsible for ensuring the agency's compliance with the Executive Order.

What is EPAct?

The goal of the EPAct is to enhance our nation's energy security. Several parts of the Act were designed to encourage the use of alternative fuels to help reduce U.S. dependence on imported oil. EPAct requirements apply to certain fleets of 20 or more LDVs that are centrally fueled or "capable of being centrally fueled" and are primarily operated in a Metropolitan Statistical Area (MSA)/Consolidated Metropolitan Statistical Area (CMSA). Vehicles heavier than 8,500 lb GVWR or not located or operated primarily in a covered MSA or CMSA are exempt from the requirements. Law enforcement, emergency, and military tactical vehicles are also exempt. For FY 1999 and beyond, 75% of a Federal fleet's covered vehicle acquisitions must be AFVs.

To find out whether your fleet is covered under EPAct, start with the list of MSAs/CMSAs or answer a short series of questions in the Clean Fleet Guide.

Compliance with EPAct is met by AFV acquisition credits, which are granted on the basis of the number of AFVs acquired and the quantity of biodiesel fuel used. Agencies earn one AFV acquisition credit toward EPAct compliance for each AFV acquisition. Extra credits are awarded for dedicated light-, medium-, and heavy-duty AFVs (see table below). Federal fleets cannot bank credits or trade them with other agencies.

The Energy Conservation Reauthorization Act of 1998 (ECRA) amended EPAct to allow fleets to generate one AFV acquisition credit for every 450 gallons of pure biodiesel (B100, equivalent to 2,250 gallons of B20) purchased for use in diesel vehicles more than 8,500 lb GVWR. To receive credit for an AFV acquisition, the biodiesel must be neat (B100) or in blends that contain by volume at least 20% biodiesel (B20). Federal fleets are allowed to use these credits only to fulfill up to 50% of their EPAct requirements. These credits can be claimed only in the year in which the fuel is purchased for use, and they cannot be traded among fleets.

What is E.O. 13149?

E.O. 13149 aims to ensure that the Federal government demonstrates leadership in reducing petroleum consumption through improvements in fleet fuel efficiency and the use of AFVs and alternative fuels. Under E.O. 13149, any Federal agency with a fleet of 20 or more vehicles developed a compliance strategy for reducing its annual petroleum consumption by 20% by the end of FY 2005. Fuel consumption from light-, medium-, and heavy-duty vehicles was included. However, the fuel consumption of law enforcement, emergency, and military tactical vehicles is exempt from this requirement.

To encourage the use of alternative fuels, E.O. 13149 awards additional credits to fleets that fulfill their EPAct requirements by purchasing dedicated AFVs and using biodiesel fuel. The following table outlines the credit structure for AFV acquisitions.