UPS Agrees To Substantial Renewable Diesel Purchase
On July 29, UPS announced that it will buy as much as 46 million gallons of renewable diesel over the next three years, helping the company reach a goal of displacing twelve percent of the petroleum-based fuels in its ground fleet by 2017.
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.
The company hopes the agreements will help stimulate investment to develop the technologies and feedstocks needed to bring the cost of renewable diesel in line with conventional diesel.
Unlike ethanol or other biofuels, there are no limits on how much renewable diesel can be blended with conventional fuel.
The UPS deals follow recent announcements about the use of renewable fuels in aviation, an arena in which analysts expect to see demand grow.
In June, United Airlines announced a $30 million investment in a large producer of aviation biofuels, and in mid-July Red Rock Biofuels said it would produce about three million gallons of renewable jet fuel each year for FedEx, with delivery to begin in 2017 and run through 2024.