UPS inks major renewable natural gas deal with Clean Energy

In its most recent example of maintaining a keen focus on supply chain sustainability, global transport and logistics bellwether UPS announced today that it has inked a deal with Clean Energy Fuels Corp. to purchase 170 million gallon equivalents of renewable natural gas (RNG) through 2026.

UPS said this represents the “largest commitment for use of RNG to date by any company in the United States, with a range of 22.5-25 million gallon equivalents per year. And it added that RNG is a major element of the company’s goal to increase alternative fuel consumption to be 40% of total ground fuel purchases by 2025, coupled with its initiative to reduce the absolute greenhouse gas emissions (GHG) of its ground fleet 12% by 2025.  

“UPS is working toward a set of environmental goals that address the GHG emissions of our facilities and ground fleet,” UPS Director of Fleet Procurement Mike Casteel told LM. “We are measuring the progress of our global ground operations in absolute terms, seeking a 12% reduction in GHG emissions by 2025 [2015 baseline]. In our industry, the use of renewable energy is critical to reducing absolute emissions.  RNG will be one of the main strategies used to achieve our goal.”

One of the major drivers for UPS to boost its RNG usage, explained Casteel, is that e-commerce growth is continuing to drive a need for increased capacity across the company’s network, including fleet expansion and facility automation, both of which requires ore energy and generate more emissions.

“Increasing the use of renewable energy across our fleet and facilities is the key pathway to achieving this goal,” he said. “At the end of 2017, 22% of all ground fuel was sourced from alternative sources, and we have made slight reductions to our overall GHG emissions.  We will be publishing our 2018 sustainability report and 2018 goal progress in August.”

What’s more, going back to 2014, UPS has used more than 28 million gallons of RNG fleet, and with today’s announcement it will now use nearly as much RNG in a single year as it has in the last five years in total.

Taking that a step further, UPS pointed out that by switching from diesel fuel to RNG, UPS vehicles that are fueling at 18 company-owned and operated natural gas stations across 12 states will see major GHG reduction, up to 1,074,000 metric tons of GHG over the span of UPS’s deal with Clean Energy. Putting that reduction into perspective, UPS said this serves as the equivalent to planting 17,000,000 trees, removing 228,000 cars off the road, or recycling 374,000 tons of waste that would be going to a landfill.

UPS said fueling stations in the following cities will use RNG from Clean Energy to operate UPS delivery vehicles: Albuquerque, N.M.; Atlanta, Ga.; Chattanooga, Tenn.; Commerce City, Colo.; El Paso, Texas; Fort Worth, Texas; Kansas City, Kan.; New Orleans, La.; Oklahoma City, Okla.; Omaha, Neb.; Phoenix, Ariz.; Port Allen, La.; Salt Lake City, Utah; San Antonio, Texas; Shreveport, La.; Sparks, Nev.; Tifton, Ga.; and,Trinidad, Colo.

When asked what the biggest customer, or shipper, benefits of today’s announcement are, Casteel explained that as UPS reduces its over all GHG emissions, it is also reducing the emissions for all of its customers that use the UPS network. 

“Our customers want to ship more but with less impact,” he said. “In addition to initiatives like the use of RNG, we also offer other sustainable solutions to help minimize the environmental impacts associated with their supply chains.”

Looking ahead, Casteel said that UPS is hoping that this large commitment for RNG will stimulate interest and action among other potential suppliers to engage, and, possibly interest other fleets in using natural gas, which enables the use of RNG.

“The use of renewable fuels is key to UPS achieving its absolute GHG emissions reductions goals,” he said. “UPS will continue to invest in alternative fuels and technologies.  By 2020, one in every four new vehicles purchased annually will be an alternative fuel or an advanced technology vehicle.” 

Tyler Henn, vice president and general manager of Clean Energy Renewables, a division of Clean Energy, said in a statement that together, UPS and Clean Energy are moving the industry forward and toward a nation of energy independence by pushing for RNG at scale.

“We’re excited to deliver Redeem to a partner with a substantial alternative fleet and an ongoing commitment to RNG,” Henn said. “We’re pleased to be able to fulfill the growing demand for RNG as more fleets seek a clean, economical alternative.”