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UPS announces renewable diesel agreements with Neste, REG and Solazyme; up to 46M gallons over next 3 years

UPS announced agreements for up to 46 million gallons of renewable diesel over the next three years, constituting a 15-fold increase over prior contracts and making UPS one of the largest users of renewable diesel in the world.

Neste, Renewable Energy Group (REG) and Solazyme will supply renewable diesel to UPS to help facilitate the company’s shift to move more than 12% of its purchased ground fuel from conventional diesel and gasoline fuel to alternative fuels by the end of 2017. UPS has previously announced a goal of driving one billion miles with our alternative fuel and advanced technology vehicles by the end of 2017.

Renewable diesel is an advanced hydrocarbon-based fuel that is fully interchangeable with petroleum diesel and offers superior performance and benefits, much like how synthetic lubricants are used in cars instead of petroleum-based lubricants. Bio-based feedstocks from fats, plant oils and waste residues are converted to renewable diesel using advanced refining technologies. These new bio-refineries also have the capability to produce other renewable fuels such as renewable jet fuel, renewable gasoline and renewable propane.

  • Neste, headquartered in Espoo, Finland, is the world’s largest producer of renewable diesel. Neste produces NEXBTL renewable diesel from a variety of feedstocks including more than half from waste and residues.

  • REG, headquartered in Ames, Iowa, produces renewable hydrocarbon diesel fuel from waste vegetable oils and animal fats at its Geismar, Louisiana, bio-refinery as well as biodiesel at nine bio refining locations in the US.

  • Solazyme, headquartered in San Francisco, produces a blended fuel made from microalgae and other renewable feedstocks.

Advanced alternative fuels like renewable diesel are an important part of our strategy to reduce the carbon emissions impact of our fleet. We have used more than three million gallons of renewable diesel to date with positive results. Renewable diesel has a huge impact significantly reducing lifecycle greenhouse gas emissions by up to 90% less versus conventional petroleum diesel. Renewable diesel also performs well in cold weather, does not have any blending limitations and can be easily ‘dropped in’ to our fuel supply chain without modifications to our existing diesel trucks and equipment.

UPS believes these agreements are especially important because they will help stimulate demand for investment in refinery technologies and sustainable feedstocks needed to produce renewable fuels at a total cost that is comparable to more carbon-intensive petroleum fuels.

—Mark Wallace, UPS senior vice president, global engineering and sustainability

UPS has been using renewable fuels for more than a year in trucks operating in Texas and Louisiana. The new agreements pave the way for expanded use across the US and potentially in parts of Europe.

White House climate pledge. Concurrent with the announcement of the renewable diesel agreements, UPS Chief Sustainability Officer and Vice President of Environmental Affairs Rhonda Clark joined Secretary of State John Kerry, senior White House officials and 12 other companies to launch the American Business Act on Climate Pledge.

UPS puts forth its pledge as follows:

One of the key tools we use to evaluate our carbon reduction progress is the UPS Transportation Intensity Index, which normalizes our greenhouse gas (GHG) emissions to business volume (such as by reducing the amount of fuel required to travel a given distance or to carry a given amount of cargo or packages); covers 96% of our worldwide Scope 1 and Scope 2 CO2e emissions; and combines data from separate carbon intensity metrics associated with our business segments. In 2013, successful execution of our global GHG strategy enabled us to exceed a 10% reduction in carbon intensity three years ahead of our 2016 goal. In 2014, we achieved a 14.1% reduction in our carbon intensity versus a 2007 baseline as a result of successfully executing carbon reduction strategies in our ground and air fleet. Accordingly, we have pledged to double the goal to a 20% reduction by 2020, as measured by our UPS Transportation Intensity Index, off a 2007 baseline.

To achieve by 2017 a cumulative billion miles of package or freight movement in our alternative fuel/technology truck fleet that we expect will number over 7,700 trucks by the end of 2015.

The UPS plan includes:

  • Network and mode optimization to minimize the miles traveled and energy consumed.

  • Investments in fuel-saving technologies to reduce dependency on petroleum-based fuels.

  • Investments in alternative fuel vehicles to help offset the use of conventional petroleum fuels.

  • Energy conservation through facility design, operational practices, renewable energy, and retrofitting.

  • Accurate, verified disclosure of global greenhouse gas emissions data per recognized standards.

The companies participating in the American Business Act on Climate Pledge launch include: Alcoa; Apple; Bank of America; Berkshire Hathaway Energy; Cargill; Coca-Cola; General Motors; Goldman Sachs; Google; Microsoft; Pepsi-Co; UPS; and WalMart. The companies making pledges as part of today’s launch represent more than $1.3 trillion in revenue in 2014 and a combined market capitalization of at least $2.5 trillion.


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