Save 25% on fuel costs, cut emissions by 80%, without waiting for the year 2580

New Optimus “pure biofuels” technology for medium-to-heavy truck fleets, wins EPA OK. 

The 25/50 rule for medium- and heavy-duty trucking fleets, up until now, could generally be stated as “to get 25% fuel savings and a 50% reduction in emissions, you’ll probably have to wait until the year 2550, or get payback in 2550.”

This week, news came from the EPA that they have approved a 25/50 biofuel conversion solution for existing medium- and heavy-duty trucks, provided by Optimus Technologies. In fact, up to 25/80 – that is, 25% savings on fuels and 80% savings on emissions, with payback for large fleets on less than one year.

Interestingly, while the EPA ruling covers a wide range of fuel types, it is the first to achieve compliance for use with pure biofuel derived from recycled cooking oil.

A  30-second backgrounder on diesel

You might have read in science class that Rudolf Diesel originally designed the diesel engine to run on straight peanut oil. But, over time, engines evolved beyond peanut oil, and now are designed around petroleum diesel. So, to run straight veggie oil, recycled cooking oil, algae oil, etc etc — well, you either have to adjust the vehicle to tolerate the new fuel, or treat the fuel so it works with existing vehicles.

For most of the fleet, the latter is preferable, and that’s biodiesel. It’s transesterified, generally, to remove the glycerine that makes the oil gummy, and thereby reduces clogging, corrosion & coking.

But for really big fleets, you can occasionally contemplate upgrading the vehicles. It’s attractive to think about because “Pure biofuels” typically price around 25% less than diesel (which is less, in turn, than most biodiesel blends). Some solutions are available in the EU, none to date have been approved in the US.

Making this EPA action a big deal.

Plus, fleet managers need a fuel system solution that is compatible with all modern emission aftertreatment systems such as selective catalytic reduction systems (SCRs) and diesel particulate filters (DPF); also, that refuel in the same amount of time as with diesel, without any special training or certifications; and require no special certifications for fleet maintenance. Above all, they’ve wanted simple conversion — no major engine overhauls, replacements or rebuilds.

Why do fleet managers even bother, given that mountain of hurdles?

Bottom line, they’re besieged by challenges. The three big ones:

1. Reducing fuel costs
2. Addressing incremental emissions regulations
3. Meeting domestic fuel production and sustainability mandates

Ah, grasshopper, well may you incant the magic words “CNG” — chant “compressed natural gas” or “liquified natural gas” at fleet management meetings. You’ll find interested parties for sure. Fleet managers are attracted by the 50% reduction in fuel costs. You’ve probably seen some buses and commercial delivery fleets going that way.

But — bottom line — the CNG and LNG options have some tough challenges. First of all, the conversion costs can be a scandal — payback can extend out more than 5 years, taking all costs into consideration, too long for most 3-year-or-less corporate thresholds.

Then you have the emissions and sustainability challenges of staying with fossil fuels, even if gas is cleaner than diesel. There are the extraction controversies around fracking. Also, there is the unburned fuel release associated with methane.

It’s been no slam-dunk to convert over to biodiesel, either. For all biodiesel blends, there have been challenges on fuel cost. Biodiesel — especially in the long-term after tax credits expire — has been generally more expensive. Some fleet managers point to NOx emissions, and concerns about operating in extreme temperatures.

Bottom line, fleet managers want real cost savings — not a situation where you have elongated payback because of change-over costs, or higher costs. And they’d like better options on emissions and performance.

So, the EPA has given the nod to Optimus, and it could be a big thing.

Especially for retail/wholesale delivery, cement delivery, waste services, and road maintenance fleets that have usage of more than 5000 gal/yr per truck, use their own fuel depots, and have corporate mandates to reduce fuel costs and meet emissions mandates.

The Optimus solution

The solution is based on a combination of Optimus’ Vector bi-fuel (diesel or biofuel) conversion system — hardware and software that bolts-on to existing diesel engines — and certified, pure biofuel.  Fuels tested were derived from a variety of bio-sources including non-food grade corn oil, recycled cooking oil, and pure biodiesel (B100).

Here’s a diagram of the Vector system.

The cost comparison is interesting. Optimus says that the vehicle conversion is $9K per vehicle, vs up to $70K for CNG. The fuel depot conversion is around $150K, vs as much as $2.0 million for CNG. Those figures come from Optimus — and will vary by fleet, so buyer beware.

But based on those assumptions, a 100-truck fleet averaging 7500 gallons per vehicle per year would see payback in 10 months from Optimus, vs as much as 5 years for CNG. A 25-truck fleet would get payback in 24 months, generally well above corporate investment hurdle rates.

Plus, there are lifecycle emission gains of up to 80% — well above target for almost any fleet manager.

Ongoing maintenance is routine — yearly replacement of a fuel filter within the Vector Manifold; no special training or certifications for fleet staff; refuels in the same time and has a comparable range to diesel, so no need to reprogram routes. Optimus advises that the solution works for medium‐ and heavy-duty trucks that are used even in the harshest environments. The EPA’s approval covers, in this round, the Navistar DT 466 engine platform, so around 30 percent or so of fleets. More approvals are expected for other engine platforms, by end of 2014.

Emissions data

Emissions tests conducted for Optimus’ approval in May were performed and validated by the West Virginia University Center for Alternative Fuels, Engines, and Emissions. The results showed a significant overall reduction in tailpipe emissions in comparison to diesel. Specifically, particulate matter was reduced by about 40%.  Further, nitrogen oxide (NOx) emissions were reduced with all fuels tested, including when used with B100. The Vector system was approved for use on Navistar DT466 engines between the model years 2004 and 2006. Field trials and certification tests on other engines are currently underway.

Fuel providers

How do the customers of Optimus technology obtain their fuels? Through their own sourcing, or via a partner network that Optimus is building. (Note: Fuel providers seeking certification to the Optimus fuel standard and inclusion with its partner network are encouraged to contact Optimus Technologies for further information.)

The Bottom line

As Optimus founder Colin Huwyler explains, “CNG is a strong driver on per gallon costs, but for many its a short sighted strategy. The feedback we’re hearing more and more is that the costs upfront really make the economics of conversion cost prohibitive.”

“We’re giving access to commercial fleets and munis to a low cost technology solution that will reduce costs and emissions, and we’re building an expanding partner network to provide those fuels, concentrated initially in the Midwest and East Coast.

More on the story.