UPS agrees renewable fuel deal

UPS, one of the world’s largest package delivery companies, has this week announced agreements for up to 46 million gallons of renewable fuels 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.

The agreements with three leading suppliers secure access to an advanced renewable diesel fuel in order to meet the company’s goal of driving one billion miles with their alternative fuel and advanced technology vehicles by the end of 2017.

This plan will help UPS shift to move more than 12 percent of its purchased ground fuel to alternative fuels. The renewable fuels, from three suppliers, are chemically so close to their petroleum-based counterparts that they can replace them in engines and pipelines. They are made from an array of bio-based sources, including palm and waste oils, and animal fats.

Renewable diesel will reduce UPS’ lifecycle greenhouse gas emissions by up to 90 percent compared to conventional petroleum diesel, says Mark Wallace, UPS senior vice president, global engineering and sustainability. “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,” he says.

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

The UPS deals also follow recent announcements about the use of renewable fuels in aviation, an arena in which analysts expect to see demand grow.