UPS Reaches Large Renewable Natural Gas Deal With Clean Energy Fuels -- Update

By Colin Kellaher

United Parcel Service Inc. (UPS) on Wednesday said it will buy 170 million gallon equivalents of renewable natural gas over seven years from Clean Energy Fuels Corp. (CLNE) as it works to increase alternative fuel consumption to 40% of its total ground fuel purchases by 2025.

The Atlanta package-delivery giant said it will buy 22.5 million to 25 million gallon equivalents a year under the deal, which it termed the largest purchase ever in the U.S. of renewable natural gas, or RNG.

UPS said the switch to RNG from diesel fuel will reduce greenhouse-gas emissions from its fleet by more than 1 million metric tons over the life of the agreement, adding that it will now be using nearly as much RNG in one year as it has over the past five years combined.

Clean Energy said its Redeem RNG, which it derives by capturing biogenic methane that is naturally produced by the decomposition of dairy, landfill and wastewater treatment plant waste, enables at least a 70% reduction in carbon emissions when displacing diesel or gasoline.

UPS said 18 company-owned natural-gas stations in 12 states will use the RNG from Clean Energy to fuel UPS delivery vehicles. The company operates more than 6,000 vehicles in the U.S. that can be powered by RNG.

Shares of Clean Energy, a Newport Beach, Calif., provider of natural-gas fueling for vehicle fleets co-founded by legendary oilman T. Boone Pickens, rose 7% to $2.98 in late morning trading Wednesday.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

May 22, 2019 11:30 ET (15:30 GMT)

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