UGI and Vertimass in 15-year agreement to produce renewable fuels in the US and Europe; $500M investment; propane and SAF
UGI Corporation has entered into a 15-year agreement with California-based technology developer Vertimass to utilize their catalytic technology to produce renewable fuels from renewable ethanol in the US and Europe.
Vertimass is developing a unique Consolidated Alcohol Deoxygenation and Oligomerization (CADO) technology to allow ethanol producers to:
Produce sustainable aviation fuel (SAF) and diesel blendstocks that are compatible with the current transportation fuel infrastructure as well as LPG (liquified petroleum gases, mainly propane and butane);
Eliminate the ethanol “blend wall” by converting ethanol into fungible gasoline components for powering light duty vehicles;
Produce intermediates used to make plastics and other higher value products; and
Possibly debottleneck processes to increase throughput with little additional costs other than for feedstock.
CADO completely converts wet ethanol (and other alcohols) into targeted hydrocarbons in a simple reactor system at moderate temperatures and near atmospheric pressure without adding hydrogen. Other benefits include the ability to lower plant water usage, reduce overall energy consumption, and drop GHG emissions to levels required for the Renewable Fuel Standard (RFS) Advanced Biofuel category.
The agreement centers on the development of production facilities using Vertimass’ catalytic technology to convert renewable ethanol into renewable-propane and sustainable aviation fuel (SAF). The technology enables flexible production of the renewable fuels to align with regional market demand. Up to 50% of the total production capacity from the facilities can be renewable propane that will support UGI’s ongoing efforts to provide innovative, low-carbon, sustainable energy solutions to its customers.
Renewable LPG, also known as renewable propane, is chemically identical to today’s fossil LPG (C3H8) and therefore can be used with existing infrastructure. It has up to 80% lower carbon footprint than that of conventional LPG.
UGI expects to invest either solely, jointly with Vertimass or in partnership with third parties to build and operate multiple production facilities over the next 15 years in locations across the US and Europe, significantly increasing the supply of renewable-propane and SAF.
Vertimass’ technology can be bolted on to existing ethanol production facilities, optimizing GHG emissions reduction, and bringing further end product diversification to the existing ethanol producer. UGI anticipates a total investment of roughly $500 million for the bolt-on production facilities over a 15-year period, including potential third-party investment, with total production target from these aggregated facilities of approximately 1 billion gallons of combined renewable fuels per year.
The goal is to have the first production facility onstream in fiscal year 2024 with an annual production target of approximately 50 million gallons of combined renewable fuels.
UGI Corporation is a distributor and marketer of energy products and services. Through subsidiaries, UGI operates natural gas and electric utilities in Pennsylvania and West Virginia, distributes LPG both domestically (through AmeriGas) and internationally (through UGI International), manages midstream energy assets in Pennsylvania, Ohio, and West Virginia and electric generation assets in Pennsylvania, and engages in energy marketing, including renewable natural gas in the eastern region of the United States and California, and internationally in France, Belgium, the Netherlands and the UK.