How to Calculate IFTA When You Run Multiple Fuel Types (Diesel, DEF, Reefer)

Most IFTA guides assume your entire fleet runs on highway diesel. But if you operate refrigerated trailers, use diesel exhaust fluid (DEF), or run vehicles on propane, compressed natural gas (CNG), or liquefied natural gas (LNG), your quarterly IFTA filing gets more complicated. Each fuel type has its own tax rate, its own MPG calculation, and — in some cases — its own separate schedule on the return. Getting the separation wrong can trigger an audit, result in underpayment penalties, or leave credits unclaimed.

This guide walks through how IFTA handles multiple fuel types, how to separate your fuel purchases correctly, and practical tips for keeping clean records when you're buying more than just highway diesel at the pump.

In this guide, you will learn:

• How IFTA treats different fuel types on quarterly filings
• Diesel vs reefer fuel separation and why it matters
• Whether DEF counts as IFTA-reportable fuel
• How propane, CNG, and LNG factor into IFTA
• Practical tips for tracking and separating fuel purchases

How IFTA Handles Different Fuel Types

Under IFTA, fuel tax rates are published by fuel type. The standard IFTA tax rate table includes separate columns for diesel, gasoline, gasohol, propane (LPG), compressed natural gas (CNG), liquefied natural gas (LNG), ethanol (E85), methanol (M85), and a catch-all "other" category. Each fuel type has a different tax rate per gallon (or per gallon equivalent for gases) in every jurisdiction.

When you file your quarterly return, you report each fuel type on a separate schedule. If your fleet uses both diesel and CNG, you file Schedule 1 for diesel-powered vehicles and a separate Schedule 1 for CNG vehicles. The miles, MPG, and fuel purchases must be tracked independently for each fuel type. You cannot mix diesel gallons with CNG gallon equivalents — the math breaks down because the tax rates and energy content are different.

Most carriers run exclusively on diesel, so they file a single schedule. But the moment you add a second fuel type to your fleet, you need a parallel tracking system for that fuel's miles and purchases.

Diesel vs Reefer Fuel: The Most Common Separation Problem

The single most common multi-fuel issue for trucking companies is separating highway diesel from reefer fuel. A refrigerated trailer uses a separate diesel-powered unit (the reefer unit or transport refrigeration unit, TRU) to keep the cargo cold. That reefer unit burns diesel, but it is not propelling the vehicle on the highway. IFTA only applies to fuel consumed by the qualified motor vehicle for highway travel.

Here's the rule: reefer fuel is not reportable under IFTA. If your reefer unit draws from the truck's main fuel tank (a common setup), you need to calculate how much fuel the reefer consumed separately and exclude it from your IFTA fuel totals. If you don't make this separation, you'll overstate your fuel purchases, inflate your fuel credits, and underreport the tax you owe — a red flag for auditors.

How to Separate Reefer Fuel

There are two common configurations for reefer fuel, and each requires a different approach:

• Separate reefer tank: If the reefer unit has its own fuel tank that you fill independently, the separation is clean. Fuel going into the reefer tank is non-IFTA. Fuel going into the truck's tank is IFTA-reportable. Keep separate receipts or note which tank was filled on each receipt.
• Shared fuel tank: If the reefer draws from the truck's main diesel tank, you need to estimate reefer consumption. Most carriers use the reefer manufacturer's rated fuel consumption (typically 0.5 to 1.5 gallons per hour) multiplied by hours of reefer operation. Subtract that from your total diesel purchases to get your IFTA-reportable gallons.

For shared-tank setups, keep a log of reefer operating hours for each trip. Many modern reefer units have hour meters or telematics systems that record runtime. This data is your documentation if an auditor asks how you calculated the split.

Reefer Fuel Calculation Example

A carrier runs a refrigerated load from Atlanta to Chicago. Total distance: 720 miles. The truck consumed 120 gallons of diesel total (from a shared tank). The reefer unit ran for 14 hours at a rated consumption of 1.0 gallon per hour.

• Reefer fuel consumed: 14 hours × 1.0 gal/hr = 14 gallons
• IFTA-reportable diesel: 120 − 14 = 106 gallons
• IFTA MPG for this trip: 720 miles ÷ 106 gallons = 6.79 MPG

If you had reported all 120 gallons as IFTA fuel, your MPG would be 6.0 — artificially low. More importantly, you'd be claiming fuel credits for 14 gallons that never propelled the vehicle. Auditors specifically look for fleets with reefer operations that don't separate fuel, because the overclaimed credits are significant over a full quarter.

DEF (Diesel Exhaust Fluid): Not IFTA-Reportable

Diesel exhaust fluid is used in SCR (selective catalytic reduction) systems on modern diesel engines to reduce NOx emissions. DEF is not a fuel — it is an emissions control consumable. It does not combust in the engine and does not propel the vehicle.

DEF is not reportable under IFTA at all. You do not include DEF purchases in your fuel totals, you do not get fuel credits for DEF, and DEF does not appear on any schedule of your IFTA return. Treat DEF the same way you treat oil changes or coolant — it's an operating expense, not an IFTA fuel purchase.

The confusion arises because DEF is often purchased at the fuel island alongside diesel. Some fuel receipts combine diesel and DEF on the same transaction. If your receipts do not clearly separate diesel from DEF, ask the truck stop for an itemized receipt or use your fuel card reporting system to pull diesel-only totals. Mixing DEF into your diesel gallons will inflate your fuel purchases and create discrepancies during an audit.

Propane (LPG) Under IFTA

Propane-powered vehicles that meet IFTA qualifications (gross vehicle weight over 26,000 pounds, or three or more axles regardless of weight, and operating in two or more IFTA jurisdictions) must report propane fuel separately. Propane has its own tax rate in each jurisdiction — typically lower than diesel — and its own line on the IFTA tax rate table.

The key difference with propane is the unit of measurement. While diesel is reported in gallons, propane may be measured in gallons at the pump or in gallon equivalents depending on the jurisdiction. Check the IFTA rate table footnotes for the specific reporting unit your base jurisdiction requires.

Propane-powered trucks are less common in long-haul trucking but appear in regional delivery fleets and specialized operations. If you have even one propane vehicle in a fleet that otherwise runs on diesel, you file two separate schedules: one for diesel and one for propane. The miles driven by each vehicle type feed into the corresponding schedule.

CNG and LNG Under IFTA

Compressed natural gas (CNG) and liquefied natural gas (LNG) are growing fuel types in trucking, particularly for regional and refuse fleets. Both are reportable under IFTA and each has distinct tax rates. Some states heavily incentivize natural gas vehicles through lower fuel tax rates, making the IFTA math quite different from diesel.

CNG Reporting

CNG is measured in gasoline gallon equivalents (GGE) or diesel gallon equivalents (DGE) for IFTA purposes. One GGE equals approximately 126.67 cubic feet of natural gas at standard pressure. When you fuel a CNG vehicle, the pump may display cubic feet, therms, or GGE — you need to convert to the unit your base jurisdiction requires on the IFTA return.

Track CNG fueling separately from any diesel vehicles in your fleet. CNG vehicles will have a different fleet MPG (calculated using GGE), different tax rates, and a separate schedule on your return.

LNG Reporting

LNG is measured in diesel gallon equivalents (DGE) for IFTA purposes. One DGE of LNG equals approximately 1.554 gallons of LNG by volume. Like CNG, LNG has its own tax rate table and requires a separate IFTA schedule.

LNG is more common in long-haul operations than CNG because LNG has a higher energy density and can support longer ranges between fill-ups. Carriers running LNG tractors alongside diesel tractors must maintain completely separate mileage and fuel logs for each fuel type.

How Each Fuel Type Appears on Your IFTA Return

Your IFTA return is organized by fuel type. Each fuel type gets its own complete schedule with all jurisdictions listed. Here's what the filing structure looks like for a carrier running both diesel and CNG vehicles:

• Schedule 1 — Diesel: All jurisdictions where your diesel vehicles traveled. Diesel tax rates applied. Diesel fuel purchases credited. Fleet MPG calculated from diesel vehicles only.
• Schedule 1 — CNG: All jurisdictions where your CNG vehicles traveled. CNG tax rates applied. CNG fuel purchases (in GGE) credited. Fleet MPG calculated from CNG vehicles only.

You calculate a separate fleet MPG for each fuel type. Your diesel fleet might average 6.2 MPG while your CNG fleet averages 4.8 miles per GGE. These numbers are independent and should never be blended. If you combine all vehicles into a single MPG calculation, your tax liability will be wrong for both fuel types.

Practical Tips for Separating Fuel Purchases

Clean fuel separation starts at the pump and carries through to your accounting system. Here are the practices that prevent problems at filing time and during audits.

1. Use Separate Fuel Cards or Codes

If your fleet card provider supports it, assign different cards or product codes to different fuel types. Many major fuel card programs let you restrict a card to diesel only, or flag purchases by fuel type. This creates an automatic separation in your transaction reports and eliminates manual sorting.

2. Record Reefer Hours on Every Trip

For refrigerated operations with shared fuel tanks, record the reefer unit's hour meter reading at the start and end of every trip. This gives you documented runtime to calculate reefer fuel consumption. If your reefer unit has telematics, export the runtime report each quarter as backup documentation.

3. Keep DEF Receipts Separate

Request itemized receipts at fuel islands that show diesel and DEF as separate line items. If you use a fuel card, verify that your monthly statements break out DEF from diesel. Do not include DEF costs in your IFTA fuel purchase totals.

4. Track Miles by Vehicle (Not Just by Driver)

If you have a mixed fleet with different fuel types, your mileage tracking must be per-vehicle, not per-driver. A driver who operates both a diesel tractor and a CNG tractor during the same quarter generates miles for two different IFTA schedules. GPS tracking apps that associate trips with specific vehicle IDs make this separation automatic.

5. Reconcile Monthly, Not Just at Quarter End

Fuel separation errors compound over time. If you reconcile monthly — verifying that diesel, reefer, DEF, and alternative fuel purchases are properly categorized — you catch mistakes before they become quarter-long problems. A monthly review takes 30 minutes and can save hours of cleanup at filing time.

6. Document Your Reefer Fuel Methodology

Write down the method you use to calculate reefer fuel consumption (manufacturer's rated burn rate, hour meter readings, or flow meter data). Keep this methodology statement in your IFTA files. If an auditor questions your fuel separation, having a documented, consistent method demonstrates good faith and makes the audit go smoothly.

What Auditors Look For in Multi-Fuel Fleets

IFTA auditors are trained to spot fuel separation issues. The biggest red flags they look for:

• Suspiciously high fuel credits: If a carrier with reefer operations claims the same MPG and fuel volume as a dry van carrier with identical equipment, the auditor knows reefer fuel wasn't separated. The overclaimed credits will be reversed and penalties assessed.
• DEF mixed into diesel totals: Auditors can cross-reference fuel card reports with your filed fuel totals. If your filed gallons include DEF, the numbers won't match the diesel-only gallons on your fuel card statement.
• Blended MPG across fuel types: If you file a single schedule combining diesel and CNG vehicles, the MPG will be an unnatural number that doesn't match either fuel type. Auditors flag MPG figures that fall outside normal ranges for the declared fuel type.
• No documentation for reefer fuel deduction: If you claim a reefer fuel deduction but have no hour meter logs, reefer telematics data, or documented burn rate methodology, the auditor will disallow the deduction entirely.

Special Case: Auxiliary Power Units (APUs)

Some trucks have auxiliary power units — small diesel engines or generators that power cab heating, cooling, and electrical systems during rest periods. APU fuel, like reefer fuel, is not IFTA-reportable because it does not propel the vehicle. If your APU draws from the truck's main fuel tank, you need to estimate APU consumption and subtract it from your IFTA fuel total, similar to the reefer fuel calculation.

APU consumption is typically 0.2 to 0.5 gallons per hour. Track idle hours when the APU is running (many APU systems have their own hour meters) and multiply by the rated consumption to calculate the deduction.

State-Specific Considerations

While IFTA provides the overall framework, some jurisdictions have specific rules about alternative fuels:

• Tax rate differences: CNG and LNG tax rates vary dramatically by state. Some states tax natural gas at a fraction of the diesel rate to incentivize adoption, while others tax it at parity. Check the current quarter's IFTA rate table for exact rates.
• Unit conversions: Not all states use the same gallon equivalent standard for CNG/LNG. Your base jurisdiction's reporting requirements dictate which conversion factor to use.
• Propane availability: Some states have limited propane fueling infrastructure, which affects where you can generate fuel credits. Plan routes and fueling stops accordingly.

Frequently Asked Questions

Do I need a separate IFTA license for each fuel type?

No. Your IFTA license covers all your qualified motor vehicles regardless of fuel type. You file a single return but include separate schedules for each fuel type within that return.

Can I estimate reefer fuel instead of tracking it precisely?

Yes, but your estimate must be reasonable and documented. Using the manufacturer's rated fuel consumption multiplied by documented operating hours is an accepted method. What you cannot do is guess a flat percentage or provide no documentation at all.

What if I accidentally reported DEF as diesel fuel in a previous quarter?

File an amended IFTA return for that quarter. Reduce your fuel purchases by the DEF amount, recalculate your net tax, and pay any additional tax owed plus interest. Correcting it yourself before an audit is always better than having an auditor discover the error.

How do I calculate fleet MPG for CNG vehicles?

The same way you calculate diesel MPG: total miles driven by CNG vehicles divided by total CNG consumed (in gallon equivalents). If your CNG vehicles drove 50,000 miles and consumed 10,400 GGE, your CNG fleet MPG is 50,000 ÷ 10,400 = 4.81 miles per GGE.

Are electric vehicles subject to IFTA?

Currently, fully electric vehicles are not subject to IFTA reporting in most jurisdictions because electricity is not listed as a taxable fuel type under the IFTA agreement. However, this is an evolving area. Some states are implementing separate mileage-based fees for electric commercial vehicles. Check with your base jurisdiction for the latest requirements.

Bottom Line

Running multiple fuel types adds complexity to IFTA reporting, but the rules are logical once you understand the structure. Each fuel type gets its own schedule, its own MPG calculation, and its own tax rates. Reefer fuel and DEF are not IFTA-reportable and must be separated from your highway diesel totals. The carriers that get audited on fuel separation are almost always the ones who did not track reefer hours, mixed DEF into diesel totals, or blended fuel types into a single MPG. Tools like FleetCollect let you tag fuel purchases by type and vehicle, automatically separate reefer fuel using hour-meter data, and generate fuel-type-specific IFTA schedules — so the separation is handled before you ever open your return.