Society has an interest in reducing pollutants emitted from the vehicles used for transporting people and goods. The main goal of heavy-duty natural gas vehicle (NGV) incentive projects is to offer upfront monetary incentives to reduce greenhouse gas emissions and the production of regulated pollutants in the state. However, these incentives are often based on vehicle weight and do not account for environmental impacts. In addition, although heavy-duty NGVs are being used in a variety of vocation types, conventional emission models only support a limited number of these vocation types. Because of this, it is challenging to assess the precise impacts of the heavy-duty NGV (HD NGV) adoption and predict the specific environmental benefits per given operational conditions and vocation type. If government agencies realize the environmental benefits of alternative fuel vehicles (AFVs), like NGVs, with respect to vocation type and operating characteristics, it would be beneficial to design cost-effective incentive structures and implementation plans. This study primarily focused on the operational characteristics and environmental impacts of the HD NGVs incentivized in California. This study conducted pattern clustering and classification analyses to obtain drive mode compositions (DMC) over duty cycles and showed the heterogeneity of operational and emission characteristics of the vocational HD NGVs. The vocational impact analysis computed the adoption impact of 40 NGVs operating in California across ten different vocation types. The proposed evaluation framework included life-cycle nitrogen oxides (NOx) and carbon dioxide (CO2) emissions of natural gas, renewable natural gas and diesel fuel pathways and compared the lifetime NOx emission reduction potential of the considered vocation type vehicles. The resulting emission benefits of the fuel pathways were used to determine the most incentive-effective vocation types among the considered NGV applications. The multi-criteria decision-making analysis prioritized the fuel pathways based on multiple criteria which are related to an incentive effectiveness index as well as life cycle emissions. Refuse truck and transit bus pathways are likely to achieve the highest return for the total incentive granted when the vehicles are renewable natural gas (RNG)-powered. For compressed natural gas (CNG) fuel pathways, school and transit buses take the highest ranks over the various analysis scenarios. Each vocation type showed different incentive effects and emission reduction potential, which means that some vocational vehicles can play a critical role in the state’s funding and emission reduction plans. The suggested decision-making tool and assessment framework can provide useful reference data to improve the performance of future alternative fuel vehicle incentive programs.