Alternative fuels such as LPG, HVO, bio-CNG, and electricity have emerged (to varying degrees) as viable options for reducing emissions. But for fleet managers at the Fleet Summit balancing sustainability with budget accountability, the key question remains: do these fuels make economic sense?
The answer lies in understanding the total cost of ownership (TCO)—a holistic view that goes beyond upfront vehicle prices to include lifetime fuel costs, maintenance, infrastructure, incentives, and residual value.
Fuel Costs and Price Stability
LPG (liquefied petroleum gas) and HVO (hydrotreated vegetable oil) typically offer lower fuel costs per litre than petrol or diesel, and are less volatile due to lower demand and tax structures. LPG, in particular, can cost up to 40% less than petrol at the pump. Electric vehicles (EVs), meanwhile, benefit from significantly lower per-mile energy costs, especially when charged off-peak or powered by on-site renewables.
Maintenance and Downtime
Alternative fuel vehicles often have fewer moving parts or cleaner-burning engines, resulting in lower maintenance requirements. EVs eliminate oil changes and reduce brake wear through regenerative braking, while HVO produces fewer particulates, meaning less wear on filters and exhaust systems. However, LPG conversions and dual-fuel vehicles may require periodic servicing and access to trained technicians.
Infrastructure and Operational Impact
Fuel availability and infrastructure remain a key consideration. While LPG refuelling sites are widely available across the UK, on-site storage can further improve cost control and operational efficiency. EV charging requires a higher upfront infrastructure investment, but public funding and leasing models can help offset these costs. Fleet managers should factor in downtime, installation logistics, and future scalability when planning fuel transitions.
Grants, Incentives and Tax Benefits
A variety of government schemes and tax incentives can significantly reduce the upfront cost of switching. The Plug-in Van Grant (PiVG), tax breaks on EV salary sacrifice schemes, reduced VED rates for low-emission vehicles, and infrastructure funding for workplace charging points all help to improve ROI. Some local authorities also offer support for alternative fuel vehicles operating in Clean Air Zones (CAZs).
The Bigger Picture: ROI and ESG
While the economics of alternative fuels depend on fleet size, use case, and location, many organisations are already seeing returns through lower running costs, improved ESG performance, and enhanced eligibility for public sector contracts with sustainability requirements.
Evaluating TCO and ROI is a move toward a cleaner, more cost-efficient future.
Are you searching for LPG/Alternative Fuel & Fuel Management solutions for your organisation? The Fleet Summit can help!
Photo by Mick Haupt on Unsplash
