2025 Transportation Decarbonization Report

Federal

Under President Trump’s leadership, the regulatory landscape is anticipated to shift toward widespread deregulation, placing more responsibility on state and local governments to advance sustainability initiatives. While this decentralized approach may hinder federal climate efforts and result in uneven progress across the country, it also opens the door for companies to step up and lead sustainability efforts in their regions.  

Looking ahead to President Trump's second term, several predictions have emerged regarding the direction of environmental policies. During his previous term, the U.S. withdrew from the 2015 Paris Climate Agreement, aligning with a small group of nations, including Iran, Libya, and Yemen, that did not sign the landmark accord.  On his first day back in office, he signed an executive order expressing his intent to withdraw from the Paris Climate Agreement again. Although the formal withdrawal process takes a year between notification and exit, this sends a strong signal to the world.  

Additionally, Trump’s campaign has promised to repeal many of Biden’s climate policies, including the Inflation Reduction Act. However, the act’s funding has already made notable progress in local communities, which may make dismantling these programs politically challenging for the new administration and Congress.  

Key policies to watch this year include the EPA’s Phase 3 Heavy-Duty Vehicle (HDV) Emissions Standards, evolving regulations around fossil fuel production, and the potential reintroduction of the Rail Safety Bill. Together, these developments will shape the next chapter of U.S. climate policy, with implications for both government and private sector leadership. 

State

Clean Fuel Standards
Clean fuel standards set limits on the emissions intensity of fuel supplies produced in or supplied to the state. Clean fuel standards create additional costs for traditional fuels while also creating a new market for alternative fuels. 

Cap-and-Trade
Cap-and-trade programs set a limit, or a cap, on the amount of CO₂ that can be emitted for a given year from either the entire economy, key sectors, or covered entities emitting above a certain threshold. Each year, the cap declines, incentivizing organizations to either reduce emissions or purchase allowances. 

International

Corporate Sustainability Reporting Directive (CSRD) 
The EU’s Corporate Sustainability Reporting Directive (CSRD) has extended its compliance deadline for non-EU companies to 2026. This regulation will apply to a broader set of large companies, as well as listed small and medium-sized enterprises (SMEs). Additionally, non-EU companies generating over EUR 150 million in the EU market will also need to comply. This extension allows key industries such as oil, gas, transport, and energy to align their operations with the new sustainability reporting standards, ensuring they are positioned to meet these requirements. 

Marine

EU Emissions Trading System 
The EU Emissions Trading System (ETS) expanded its efforts to include shipping emissions starting in 2024. Initially covering 40% of emissions from large cargo vessels, this scope will expand to 70% in 2025. 

FuelEU

The FuelEU, which comes into effect in 2025, mandates ships calling at EU ports to reduce the greenhouse gas intensity of their fuels. Additionally, ships operating in the Mediterranean SOx Emission Control Area (ECA) will face stricter sulfur content limits starting in May 2025, underscoring the region’s commitment to curbing air pollution from maritime transport. 

Renewable Natural Gas (RNG) 

RNG has emerged as one of the leading alternatives to diesel, providing greater cost stability and a lower environmental impact. Depending on the feedstock, RNG can reduce emissions by up to 151%, and RNG can lower fuel costs by 56%.

RNG is derived from organic waste, and its use significantly cuts carbon emissions, making it a powerful fuel type for transportation leaders looking to decarbonize their fleet. 

One of the standout advantages of RNG is its compatibility with existing infrastructure, nearly every CNG station can be used to dispense RNG. This is especially important given that there are over 770 public CNG stations in the U.S. that are accessible to Class 8 trucks. Although CNG equipment comes at an on-cost, it is significantly lower than that of electric vehicles. This added expense may influence decisions, but it can be balanced by long-term fuel savings. 

Electric Vehicles (EVs) 

Electric vehicles have also become a crucial part of the alternative energy landscape, offering 60% emissions reduction and 52% lower fuel costs than diesel. While the upfront vehicle cost is more expensive than a diesel truck, overall maintenance costs are on average 40 to 70% lower. One primary concern of adopters is the number and location of EV charging infrastructure. EV charging infrastructure is still being developed along major interstates, initiatives are planned to alleviate these concerns.

A third of carriers (34%) say they plan to add battery electric vehicles (EVs) to their fleets in 2025 (Source: Breakthrough's 2025 State of Transportation Report). A significant initiative to address this gap is the $248.9 million grant awarded by the EPA to the Clean Corridor Coalition, aimed at establishing a network of electric truck charging stations along the I-95 corridor. This project will create 24 charging sites with 450 ports, helping to reduce 18.6 million metric tons of GHG emissions by 2050.

Hydrogen

Hydrogen's high energy density and fast refueling times make it an appealing option, particularly for applications requiring heavy payloads and long ranges. While the upfront cost – approximately 125% more than diesel trucks without incentives – remains a barrier to broader adoption, its potential to provide zero-emission, long-distance capabilities position hydrogen as a valuable energy option. 

Biofuels

Biofuels, such as biodiesel and renewable diesel, are gaining recognition as viable and cost-competitive conventional diesel alternatives, offering significant environmental advantages. With over 1,984 fueling locations available across the U.S., biofuel infrastructure continues to expand, reinforcing its accessibility for transportation fleets. Lifecycle GHG emissions reductions vary based on the production method and feedstock used. The adoption of renewable diesel delivers up to a 76% decrease compared to conventional diesel. Additionally, their compatibility with existing diesel engines can ensure a seamless transition for fleets seeking to incorporate low-carbon fuels.  

The Power of a Polyfuel Strategy 

A polyfuel strategy enables shippers to align environmental objectives with operational demands by assessing the optimal use case for each fuel type. With a third of shippers saying limited access to alternative energy in their service area or along their routes has been a limiting factor, according to Breakthrough’s 2025 State of Transportation Report, shippers need to carefully consider their fuel options. To effectively minimize their carbon footprint, shippers must look beyond fuel selection and leverage additional, data-driven strategies for reducing emissions. 

Carrier Partnerships

Discussing sustainability plans with carriers gives shippers valuable insights for fostering strong, long-term partnerships. By promoting strategies that enhance SmartWay scores—like fuel-saving practices and investing in alternative energy equipment—shippers can achieve up to a 14% reduction in emissions per load. 

Alternative Energy 

By collaborating with carriers to understand their long-term fleet goals and willingness to invest in alternative energy equipment, shippers can take meaningful steps toward cutting transportation emissions. One effective way to gather this information is by using RFIs or RFPs to collaborate with carriers focused on adopting alternative energy-powered vehicles – an approach only 14% of shippers have adopted, according to the 2025 State of Transportation Report. This approach also allows for a precise calculation of your total emissions. 

Mode Conversion

Mode conversion is essential for reducing transportation emissions, as it enhances freight efficiency by transitioning shipments to more sustainable modes. For example, moving long-haul truck shipments to rail can improve fuel efficiency by up to 70% per load.

Route Optimization 

Route optimization is essential for reducing empty miles and maximizing load fill, helping shippers and carriers lower fuel consumption. Additionally, recent mergers and acquisitions present valuable opportunities to refine routing guides. Unused capacity contributes to 12% of emissions, which equates to 96.3 kgCO2e of transportation emissions monthly. Load fill optimization could yield nearly $1 billion in fuel & freight savings annually. 

Elevate your strategy with a transportation emissions management platform Transportation emissions management platforms, such as CleanMile, are transforming the way shippers approach carbon reduction by delivering lane-level tracking and reporting for both truckload and rail operations. These data-focused tools go beyond simple reporting, offering actionable insights that enhance efficiency while reducing emissions.   CleanMile clients are seeing an average of 6% reduction in emissions intensity in their first full year on our program.