The Planet

At UGI, we practice responsibility throughout our business. We emphasize the necessity to reduce our environmental impact and encourage conservation and energy efficiency. As a distributor of our nation’s most affordable, efficient and cleanest fossil fuels, we are the foundation to power businesses and enrich the lives of our customers. Climate change creates a challenge that UGI must address in order to continue to serve our customers’ energy needs for the next 140 years. UGI believes that safe, reliable, affordable, innovative and efficient operations will create sustainable investment opportunities and long-term value for our stakeholders.

As part of our commitment to growing our business responsibly, UGI’s Natural Gas businesses, comprised of UGI Utilities and Energy Services, joined two coalitions focused on reducing methane emissions across the natural gas value chain.

  • Our Nation’s Energy Future (“ONE Future”) coalition was formed in 2014 by natural gas production, transmission and distribution companies with a focus to collectively achieve reductions in the average rate of methane emissions across member facilities equivalent to a level of one percent (or less) of total natural gas production.
  • Natural Gas Supply Collaborative (“NGSC”) is a voluntary organization of natural gas purchasers, including utilities and power generators, whose members are committed to promoting safe and responsible practices for natural gas supply. Collectively, NGSC members deliver enough natural gas to meet the needs of more than 60 million households.

Environmental Management System

In Fiscal 2020, UGI launched its Environmental Management System (“EMS”) that aligns with the basic elements of the International Organization of Standardization’s (“ISO”) 14001 Standard. The ISO 14000 series consists of environmental standards that help organizations comply with applicable regulations, minimize impact on the environment and continually improve their processes to achieve compliance and reduce impacts on the environment. UGI’s Environmental, Sustainability and HSSE Policies are the core of our EMS and:

  • support UGI’s environmental goals;
  • support UGI ‘s legal and regulatory disclosure practices;
  • provide greater insight into UGI’s operational environmental footprint which helps inform ways in which we can improve the efficiency of our operations and reduce our overall carbon footprint by focusing on, among other things:
    • switching from diesel engines to CNG, biodiesel, and LPG-fueled vehicles;
    • implementing carbon capture technology at compressor stations;
    • continuing to replace cast iron and bare steel pipe with contemporary materials;
    • fostering ongoing improvements in efficiency;
    • maximizing “Green Power”; and
    • monitoring new technology that can support UGI’s GHG reduction targets;
  • establish programs, data collection, and streamlined assumptions to meet objectives and targets and ensure data accuracy; and
  • monitor and measure progress towards environmental goals.

Wherever we do business, our activities will be consistent with sound environmental practices and we will do the following:

  • govern and hold ourselves responsible for doing business the right way as we meet our compliance obligations and interact with regulatory agencies;
  • protect the natural environment from potential harm and degradation as we understand and reduce, where practical, the environmental impact of our activities;
  • encourage social responsibility as our employees serve and participate in our communities;
  • implement and maintain management systems with the focus on continual improvement to enhance
    environmental performance;
  • establish environmental objectives compatible with the strategic direction of our company; and
  • communicate and share our environmental values and policy with our employees and interested stakeholders.

2020 is the first year that UGI has streamlined its carbon reporting using the same methods and assumptions across its businesses. UGI has a number of goals that will be monitored using the EMS, but its new enterprise-wide goal is a 55% reduction of Scope 1 (direct) GHG emissions over the next five years1. UGI plans to evaluate and align itself with the science based targets initiative (SBTi) that aims to limit global warming to 1.5°C.

The adoption of this EMS, along with emissions goals, will allow the Company to budget and plan, monitor performance, and assess key risks, such as climate change, much more effectively. UGI will continue to disclose its performance on these environmental metrics annually.

UGI’s ESG team works with members of the finance and environmental teams across the four businesses to capture and monitor environmental data. After the data is compiled by UGI’s ESG team, it is reported to the leaders of all the businesses, senior management, and the Safety, Environmental, and Regulatory Compliance (“SERC”) and Corporate Governance Committees of UGI’s Board of Directors.

The 2018 – 2020 figures presented herein have been reviewed and verified by UGI’s Internal Audit department. The Company plans to have independent, external assurance of its environmental data in future reports.

Reducing Our Emissions – Environmental Transparency and Accountability Are Vital to Tracking Progress Towards a Sustainable Future

Managing our own emissions not only plays a key role in the long-term sustainability of the Company, but it also promotes safety and efficiency.

Scope 1 Emissions1

Indicator: Greenhouse Gas Emissions2018 Results in Metric tons of CO2 equivalent2019 Results in Metric tons of CO2 equivalent2020 Results in Metric tons of CO2 equivalent
Total Scope 1 Direct Emissions1,261,4811,389,5971,239,139

Scope 2 Emissions

IndicatorReporting Unit2018 Results2019 Results2020 Results
Scope 2 Indirect GHG EmissionsMetric tons of C02 equivalent684431,709331,1492
Electricity usage only (kWh/year)967,435971,097728,323

Scope 3 Emissions

UGI continues to enhance its disclosures and reporting metrics for our shareholders. Beginning in Fiscal 2020, we are now reporting on Scope 3 emissions for our International business unit. UGI International outsources approximately 80% of its distribution to third parties. These emissions are categorized as Scope 3 emissions and reported below.

UGI plans to enhance its data collection and reporting capabilities to enable future reporting of Scope 3 emissions across its Natural Gas businesses and AmeriGas. Scope 3 emissions for these businesses would include indirect emissions that result from our operations, such as business travel, employee commuting and customer usage, among others. Strategies to reduce emissions in these areas will be evaluated to enhance our efforts to reduce customers’ emissions through energy-efficiency programs.

UGI International

Indicator: Greenhouse Gas Emissions2018 Results in Metric tons of CO2 equivalent2019 Results in Metric tons of CO2 equivalent20205 Results in Metric tons of CO2 equivalent
Scope 3 EmissionsN/AN/A60,528

Modernizing Facilities

The UGI and AmeriGas headquarters is LEED certified Silver, is served by a 60 kWp roofmounted solar photovoltaic energy system and features an electric car charging station.

In Fall 2020, UGI Utilities completed a new state-of-the-art solar carport at the Company’s Denver, PA, headquarters. The array consists of 1,078 solar panels and works in tandem with the building’s efficient CHP system. By generating an estimated 520 megawatt-hours of power annually, the array provides GHG emissions savings equivalent to removing 77 cars from the road each year, or planting 462 acres of trees.

When the sun is shining, UGI Utilities draws power from the solar array, and throttles down its CHP system to ensure maximum use of renewable energy. This is another step forward in UGI’s commitment to reduce its carbon footprint.

 

Committed to Methane Reductions

Increasingly, methane emissions have been a focus of both UGI and our stakeholders. We take methane emissions seriously and continue to work towards highly efficient methane management. As such, UGI Utilities is a partner in the EPA’s Natural Gas STAR and Methane Challenge programs. Participation in these programs signals a commitment to reduce methane emissions and furthers our goal to be a more efficient natural gas distribution company. Among the largest operators in the Commonwealth of Pennsylvania, UGI Utilities has the highest proportion of contemporary mains – nearly 90%. Through our pipeline replacement and betterment activities, investment in efficient assets, continuous improvement of our leak detection and repair programs, and other efforts, UGI Utilities’ operational fugitive methane emissions decreased by 90% over the last 20 years. During this time, the scope of our operations doubled. Therefore, our commitment to reduce methane emissions remains critically important to both the environment and the safety of the communities we serve. To achieve 2030 and 2040 target emission reductions, UGI Utilities will need to reduce emissions by 35% by 2030 and 55% by 2040 from current levels.

Pipeline Replacement and Betterment

Commitments

  • Replace all cast iron pipes by 2027
  • Replace all bare steel pipes by 2041
  • Our replacement rate is roughly 65 miles per year

Leak Detection and Repair

A LeakAn underground leak that is non-hazardous at the time of detection and can be reasonably expected to remain non-hazardous.
Repair – No required repair time line, but must be resurveyed within 15 months of the original finding
Decreased nearly 17% over the last six years (2014-2020)
B LeakAn underground leak that is recognized as being non-hazardous at the time of detection, but justifies a scheduled repair based on probable future hazard.
Repair – Must be resurveyed within 7.5 months of the original finding, and must be repaired within 15 months of original finding
Decreased over 85% over the last six years (2014-2020)
C LeakAn underground leak that represents an existing or probable hazard to persons or property, and requires immediate repair or continuous action until the conditions are no longer hazardous.
Repair – Must be repaired immediately
Decreased over 46% over the last six years (2014-2020)

Innovative Inspection Program Technology

UGI is utilizing drone technology to bolster inspection of its natural gas pipelines under bridges and rights-of-way, and for other environmental purposes. Drones can also be equipped with leak detection equipment. In addition to the reduced inspection costs, drones are safer, more convenient, and have virtually no carbon footprint compared to traditional inspections.

Air Quality

Not only is air quality an important contributor to climate change, it impacts our relationship with the communities in which we operate, especially as we continue to combat the effects of COVID-19. We recognize our responsibility to control air emissions, including nitrogen oxides, sulfur dioxide, volatile organic compounds, hazardous air pollutants, and particulate matter from our operations to minimize environmental risks and impacts to human health. UGI actively works to reduce air emissions by maximizing operational efficiency and ensuring compliance with federal and state requirements. All but Energy Services’ Marshlands facilities operate near areas of dense population,1 however, all of our facilities with an air permit are operating below our permit limits.

Indicator2018 in tons2019 in tons72020 in tons6
NOX (nitrogen oxides)515714674
SOX (sulfur oxides)300281206
Persistent organic pollutants (POP)de minimisde minimisde minimis
Volatile organic compounds (VOC)348981
Hazardous air pollutants (HAP)244846
Particulate matter (PM)203836

Water Management

While UGI does not use a significant amount of water resources in its regular business activities, we recognize the importance of maintaining water quality. Access to clean water is a universal human right. UGI acknowledges the Human Right to Water, as defined by the United Nations, means access for everyone to sufficient, safe, acceptable, physically accessible, and affordable water.

UGI recognizes that climate change and increased periods of dry weather may lead to falling reservoir and groundwater levels, which could impact water availability and quality. Energy Services is the only business that uses water as a part of regular business activities, and that business attempts to minimize its use of fresh water. Our Bethlehem Propane Air and Hunlock 4 facilities use fresh water that comes directly from the municipal water authority and is then disposed of in an approved method (i.e. Bethlehem disposes of water in a storm drain and the Hunlock 4 facility water is expelled in the turbine exhaust as vapor). Our Hunlock Combined Cycle facility uses fresh water from the Susquehanna River for cooling and the water is then placed back into the river. UGI does not source fresh water from locations with high water risk due to the abundance of groundwater.

Water analysis is an important aspect of UGI Utilities’ gas main construction. UGI takes into account water resources when developing an asset or planning a new pipeline right of way. As part of our detailed routing and construction process, we review routing options to minimize impacts to the environment, including water resources. In addition, we conduct engineering analyses as part of our pipeline design to assess potential discharges to waterways. Through those efforts, we identify best practice management strategies for mitigating potential discharges. We include these practices in our plans and permits so that they are employed during the construction phase. This includes engineering analysis of horizontal drills below waterways to assess potential inadvertent returns to those waters, and implementation of engineering controls during the drilling operations to prevent and contain any runoff that may occur. Additionally, we comply with all applicable regulations, including the Clean Water Act.

2020 Freshwater Withdrawn and Freshwater Consumed at Energy Services’ Operations

(Thousands of Cubic Meters)

FacilityBethlehem Propane AirHunlock Combined CycleHunlock 4Total
Total Freshwater Withdrawn8 015,107.36015,107.36
% of Water Withdrawn from Locations with High or
Extremely High Water Risk
0%0%0%0%
Total Freshwater Consumed0.7886.337.4694.57
% of Water Consumed from Locations with High or
Extremely High Water Risk
0%0%0%0%

Reducing our Customers’ Emissions – Affordability, Reliability and Responsibility

Customer Conversions

UGI predominantly markets and distributes natural gas and LPG. These two energy sources are cleaner than alternatives, such as coal and heating oil. In terms of power generation, natural gas emits 50% – 60% less CO2 when compared to a typical coal plant. Converting customers from heavier hydrocarbons remains a driving factor behind our commitments to our stakeholders.

Over the past ten years, UGI Utilities has converted nearly 100,000 households to natural gas. The reduction in GHG emissions from these conversions is equivalent to removing more than 54,000 cars from the road for one year, resulting in nearly $84 million in annual energy cost savings.

Energy Efficiency and Conservation (“EE&C”) Programs

UGI Utilities offers a variety of energy efficiency programs to residential and commercial electric and gas
customers. These EE&C programs are designed to encourage customers to install high energy efficiency appliances (i.e. Energy Star Rated) over less expensive, standard efficiency appliances, by providing incentives to offset the incremental equipment cost.

Over the past three years, the UGI Save Smart Efficiency Rebate Program is responsible for saving 491,821 MCF of natural gas, resulting in 26,985 metric tons of carbon not entering the atmosphere. The program has issued over $17.8 million in rebates to customers that have chosen to pursue energy efficiency upgrades.

UGI International also offers a range of financial incentives for individuals and businesses that are interested in energy savings projects, such as condensating boilers, insulation, and more efficient appliances.

Addressing School Energy Costs

UGI has assisted schools across its service territory with energy technology improvements. Misericordia University is a notable example as UGI has partnered with the school on a series of upgrades in recent years. This fall, UGI presented an additional $100,000 EE&C rebate check to Misericordia for energy efficiency improvements made during the renovation and expansion of the University’s Frank M. and Dorothea Henry Science Center (pictured).

Misericordia received the rebate through UGI’s Gas EE&C Program. As part of the Henry Science Center construction project, which is being built to LEED Silver efficiency standards, the University installed high efficiency natural gas boilers and water heaters, as well as upgraded the facility’s insulation. As a result of these measures, Misericordia will save more than 2.8 million cubic feet of natural gas each year.

Natural Gas Helps Fuel a “Greener” Greenhouse

UGI Utilities is supplying natural gas to BrightFarms’ 280,000 square-foot sustainable greenhouse in Selinsgrove, Pennsylvania. UGI constructed a natural gas main extension to help fuel the facility’s energy needs.

BrightFarms primarily relies on the power of sunshine to grow its greens, allowing light in and to heat passively. A top-of-the-line automated greenhouse management system then manages the facility’s state-of-the-art natural gas-fueled boilers.

In support of the project, UGI provided BrightFarms with a $29,500 EE&C rebate for its installation of two high-efficiency boilers (pictured). The boilers, paired with the greenhouse management system, produce only as much heat as is required to supplement what the sun delivers.

BrightFarms uses hydroponic systems to grow fresh, local produce year-round. The Selinsgrove facility supplies over two million pounds of pesticide-free produce annually. By using water instead of soil, BrightFarms uses 80 percent less water, 90 percent less land, and 95 percent less shipping fuel than long-distance grown produce.

Combined Heating and Power

CHP systems, also known as cogeneration systems, generate electricity and useful thermal energy in a single, integrated system. Heat that is usually wasted in conventional power generation is recovered as useful energy, eliminating losses that occur when heat and power are generated separately. Cogeneration systems can operate at levels as high as 80 percent efficiency, compared to 45 percent with conventional methods. Most CHP projects have a natural gas engine or turbine radiating heat that is captured and used in a heating application. The heat is then used to drive an absorption cooling machine that produces cooling. The natural gas engine or turbine is coupled with an electric generator to produce electric power.

CHP customers in Fiscal 2020

Fleet Conversions

The demand for propane and CNG vehicle fleets continues to increase as an attractive alternative to traditional diesel vehicles. Propane fueled vehicles emit less carbon dioxide than diesel vehicles. Similar to propane, CNG burns more cleanly than diesel and can reduce emissions by as much as 90%. Reducing our fleet’s carbon footprint is an important aspect of our commitment to reduce GHG emissions. In Fiscal 2020, AmeriGas’ fleet was comprised of 278 LPG vehicles and is expected to add an additional 21 LPG vehicles in Fiscal 2021. UGI Utilities’ fleet was comprised of 114 CNG vehicles and is expected to add an additional 47 CNG vehicles in Fiscal 2021.

LPG & CNG Vehicle Summary

Business Unit20182019202092021 Estimate
AmeriGas218312278299
UGI Utilities7196114161

In addition, our Energy Services and Utilities teams have been working with customers to convert truck fleets to cleaner burning, affordable, and abundant CNG.
UGI Utilities also fuels the Lehigh and Northampton Transportation Authority (LANta) natural gas bus fleet, which had 54 CNG buses in 2020.

Investing in Alternatives

We see the potential to invest up to $1 billion in renewable energy solutions over the next 5 years.

In Fiscal 2019, UGI communicated its commitment to incorporate renewable energy solutions, such as RNG and bio-LPG, into its supply portfolio. During Fiscal 2020, UGI made several investments demonstrating that commitment.

Landfill Gas Recovery

Methane and landfill gas consumption at Broad Mountain generation facility is approximately 1.7 million Dth per year, enough Dth to heat 22,484 homes

Compressed Natural Gas

Currently operate 12 public CNG facilities and supply natural gas to an additional 13 customer-owned CNG facilities

Renewable Natural Gas

Incorporated RNG into supply portfolio; acquired GHI Energy; invested in an RNG project in Idaho; signed an agreement with Archaea Energy, LLC, which will be the largest RNG supply point in the United States to date

bio-LPG

UGI International is supplementing its supply portfolio with bio-LPG. UGI International established a partnership with Ekobenz for the supply and development of renewable bio-LPG in Europe

Solar

80,503 MWh generated in Fiscal 2020. UGI and AmeriGas headquarters is served with 50 kW of power from a roof mounted solar PV energy system

Energy Marketing in Europe

In 2017, we acquired DVEP, a Netherlands based gas and electricity marketer, which marketed ~1Twh from renewable energy sources in Fiscal 2020

  1. Scope 1 emissions do not include emissions from the Mountaineer acquisition, which is expected to close in 2021.
  2. Fiscal 2020 Scope 2 emissions comprised of UGI Utilities, Midstream & Marketing, AmeriGas, and all regions (West, North, East and Central) of UGI International.
  3. Fiscal 2019 Scope 2 emissions comprised of UGI Utilities, AmeriGas, and the North and West regions of UGI International.
  4. Fiscal 2018 Scope 2 emissions comprised of only UGI Utilities
  5. Beginning in Fiscal 2020, UGI International included all regions (West, North, East and Central) in its LPG footprint analysis.
  6. 2020 figures include the full year of UGI Appalachia system.
  7. Deterioration of 2019 air quality figures is attributable to the addition of compressor stations, expansion of gathering systems, and includes five months of UGI Appalachia system.
  8. Freshwater withdrawn from river, but not consumed.
  9. The decline in LPG units from Fiscal 2019 to Fiscal 2020 is due to efforts aimed at sizing the fleet properly based on certain utilization standards. As a result, many older vehicles were disposed.