Natural gas might not be the perfect replacement fuel for all types of commercial vehicles, but its economics are becoming extremely favorable in several key segments – and the waste industry in particular.  

And that, say experts, should spark wider adoption of natural gas-powered trucks in the near future.

“We’re finding that natural gas has a certain place when it comes to heavy truck operations,” explains Ryan Carmichael, a transportation analyst with the Toronto-based global consulting firm Frost & Sullivan. “We’re finding it’s a particularly good fit for regional fleets, port freight facilities, and especially refuse operations. And the price advantage of natural gas versus diesel in these specific segments is what will be the story line here.”

Frost & Sullivan’s research, encapsulated in a report entitled, “Strategic Analysis of the North American Class 6-8 Natural Gas Truck Market,” predicts the number of medium- and heavy-duty natural gas-powered trucks will grow from 1,950 units today to more than 29,483 units in 2017, which is roughly 8 percent of total Class 6-8 production six years from now.

Carmichael says the critical drivers for natural gas truck growth will be substantially lower fuel costs when compared to diesel along with less expensive truck natural gas engine technology, which is now coming to the market.

For example, spark-ignited compressed natural gas (CNG) and liquefied natural gas (LNG) technology add about $29,750 and $27,750, respectively, to the sticker price of a Class 6 thru 8 truck compared to its diesel-only brethren, while the pricier “compression ignition” system used for the heaviest over-the-road Class 8 models costs an additional $72,450 more on average compared with a diesel-only powered unit.

That sticker price differential can be even steeper in the waste market. For example, according to a survey conducted several years ago by Inform Inc., a New York City-based environmental research and consulting firm, the median price tag of a conventional diesel-powered refuse truck is around $170,000, while a similar CNG or LNG powered truck costs between $210,000 and $225,000. That means refuse fleets will need to expend a lot more capital up front to add natural-gas-powered trucks.

Take Houston-based Waste Management, for example: the company spent $29 million to buy 106 CNG-powered solid waste collection trucks and another $7.5 million to build a CNG refueling station just for its operations in Seattle. Also, within five years, Waste Management said all 180 collection trucks in its Seattle-based fleet will be fueled by CNG.

Waste Management already operates about 1,000 CNG and LNG vehicles across North America and currently operates natural gas fueling stations at 17 of its fleet terminals. Altogether, Waste Management expects 80 percent of its new collection vehicle purchases this year to be natural gas powered trucks.

Those CNG refuse trucks carry approximately 50 gallons of CNG, which allows them to run 10 to 12 hours and complete a typical day’s waste or recycling collection route, the company noted.  

Yet that sizable investment on the part of refuse operators could potentially yield an equally big payoff as the gap between natural gas and diesel fuel prices continues to grow.

“The real ‘push’ is going to come from the lower cost of natural gas itself,” Frost & Sullivan’s Carmichael explains, noting that data was adjusted to account for the reduced range of natural gas vehicles. “Most fleets we’ve studied conservatively pay $1.65 to $1.80 for natural gas per equivalent diesel gallon. That’s significantly lower than the nearly $4 per gallon most fleets are paying now for diesel, and that savings accrues rapidly over time.”