Prompted by regulatory changes from the U.S. Environmental Protection Agency (EPA) regarding emission standards for locomotives, several railroads and locomotive manufacturers have been working for several years to develop and test locomotives and associated tender cars which burn liquefied natural gas (LNG) and/or compressed natural gas (CNG). In response to these efforts, the Federal Railroad Administration (FRA), the federal agency with statutory and regulatory authority over locomotives and tenders pursuant to 49 U.S.C. §§ 20701-20703 (formerly known as the Locomotive Inspection Act), developed a protocol in 2013 for railroads which desired the ability to test LNG and/or CNG locomotives and associated tenders. One U.S. Class I railroad began testing LNG locomotives and tenders in 2013, but has not yet adopted wide scale use of such equipment.

In 2016, at the request of the FRA, Sandia National Laboratories, the U.S. Department of Energy entity which prepared the consequence studies for LNG shipping post-9/11, created a report detailing LNG Safety Assessment Evaluation Methods for use in considering the safety of using natural gas as a locomotive fuel. Also in 2016 FRA participated in research to evaluate the crashworthiness of LNG tenders in train-to-train collisions. To date, however, there have been no regulatory changes made to allow wide scale use of LNG as locomotive fuel. Instead, FRA evaluates each situation on a case-by-case basis and issues special permits when warranted.

Currently Florida East Coast Railway (FECR) is the only railroad which has converted its entire fleet to LNG for locomotive fuel. In 2014 it acquired 24 GE locomotives which were converted to burn LNG. Chart Industries manufactured the tenders used by FECR and the program was successfully deployed in November 2017. Indiana Harbor Belt Railroad, which operates approximately 55 miles of track throughout Chicago, has opted to convert to CNG, and has begun to implement the change. Recently locomotives fueled with LNG have been added to passenger trains in Spain as part of a trial conducted by a joint venture between train operator Renfe, and Gas Natural Fenosa and Enagás.

One of the largest hurdles to conversion from diesel fuel is the need for supporting infrastructure. Each major railroad operates over tens of thousands of route miles, and must refuel throughout its network. Like fully electric cars, railroad locomotives cannot stray far from their energy sources. FECR has a nearly unique operating franchise, running from Miami to Jacksonville, and back again. Thus, it was able to design its operations around an LNG liquefaction facility at one end of its route. Similarly, IHB locomotives remain in the Chicago terminal and never stray far from their CNG source.

For the larger railroads, the greatest opportunities may well lie with their classification yards and local switching operations. Yard switching locomotives seldom are used in over-the-road service, and dedicating CNG-converted locomotives to uses limited to short distances outside a yard-based fuel supply would impose few operating restrictions. Although adoption has been slower to materialize than originally forecast when pilot projects were first proposed in 2013, long-term emissions standards and the likely long-term availability of low-cost U.S. produced natural gas suggests the trend will continue.