Collins Bus Corp. announced on Friday that it will develop the first Type A school bus with a compressed natural gas (CNG) fuel system in an exclusive agreement with Clean Energy company BAF.

Collins, North America’s largest builder of Type A school and school activity buses, will be offering the system as an option on several models starting in the spring of 2012.

BAF provides natural gas vehicles under Ford Motor Co.’s Qualified Vehicle Modifier program.

Company officials said that CNG, when compared to diesel and gasoline fuels, provides a reduction in greenhouse emissions and has the potential to reduce fuel costs by 25 to 40 percent. More than 110,000 vehicles currently operate on CNG in the U.S., and 98 percent of natural gas is produced in North America.

“We are excited to be leading our industry in alternative fuel technologies, and CNG is the next logical step," said Kent Tyler, president of Collins Bus Corp. "Many of our customers are interested in this technology, and our leading dealers are ready to introduce it to their customers. ... When you combine CNG with our propane and hybrid-electric offerings, you can see how our team is leading the field."

Tyler added that BAF brings "expertise and a proven system to the market."

Brent Pope, director of sales at BAF, said that “CNG fuel has a significant environmental and economic advantage over diesel and gasoline fuels and will offer school districts an attractive option for their Type A buses."

Collins said it has been working on a CNG version of its bus for several years but was unable to find a viable option until partnering with BAF.

“The key factor in any alternative engine option is weight," Tyler noted. "Just landing on a new concept won’t cut it if you can’t achieve a practical range with the passenger capacity you need. We’re happy that we can get both with this option from BAF.”