UPS signs landmark agreement for supply of renewable natural gas

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UPS has signed a major agreement with waste recycling provider Big Ox Energy, a subsidiary of Environmental Energy Capital, to purchase 10 million gallon equivalents of renewable natural gas (RNG) per year. The agreement will run until 2024 and represents the largest investment by UPS in RNG to date.

In addition to the agreement with Big Ox, UPS had previously signed a five-year agreement with AMP energy for 1.5 million gallon equivalents of RNG per year from the Fair Oaks dairy farm in Indiana. The RNG agreements will help UPS reach its key sustainability goal of sourcing 40% of all ground transportation fuel from sources other than conventional gasoline and diesel by 2025.

“Natural gas is a proven alternative fuel to gasoline and diesel and is a key building block for our goal to reduce greenhouse gas emissions in our ground fleet,” said Mike Casteel, UPS director of fleet procurement.

“These agreements add significantly to our investment in the use of RNG and will help put us on track to nearly triple our annual use of RNG. They are also a direct reflection of our ongoing commitment to help shape the renewable natural gas industry.”

RNG, also known as biomethane, can be derived from many abundant and renewable sources, including decomposing organic waste in landfills, wastewater treatment and agriculture. It is then distributed through the natural gas pipeline system, making it available for use as liquefied natural gas (LNG) or compressed natural gas (CNG).

“UPS continues to make investments in renewable natural gas that help move the industry forward,” said Rob Larsen, CEO of Big Ox Energy. “Our agreement with UPS is one of the largest contracts we have signed to date and among the largest ever in the RNG market.”

UPS used 61 million gallons of natural gas in its ground fleet in 2016; this included 4.6 million gallons of RNG, and the company is on track to use 14 million gallons of RNG in 2017.

UPS drives more than 5,200 CNG and LNG vehicles in its fleet of alternative fuel and advanced technology vehicles. Earlier this year, UPS announced a US$90m investment in natural gas vehicles and infrastructure. This investment included an additional six CNG fueling stations, 390 new CNG tractors and terminal trucks, and 250 LNG vehicles.

November 27, 2017

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Dan joined Postal and Parcel Technology International in 2014 having spent the early years of his career in the recruitment industry. As assistant editor, he now produces daily content for the website and supports the editors with the publication of each exciting new issue. When he’s not reporting on the latest logistics news, Dan can be found apprehensively planning his next DIY project for his new home.

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