A year of innovation & progress
Leveraging our Infrastructure and Core Competencies to Lower Emissions for both UGI and our Customers
A strategic focus on decarbonizing our industry and investing in adjacencies
Joint Venture with SHV
- Collaboration to advance the production of renewable dimethyl ether (“rDME”) to accelerate renewable solutions for the LPG industry.
- Will bring scale and critical mass to the rDME market by developing opportunities for investment in production capacity.
UGI’s Core Competencies
UGI’s core competencies span a number of critical areas to promote growth in the renewables space, including:
- proven supply capabilities and vast energy marketing experience;
- a history of safe pipeline management, project management, and process engineering;
- experience in renewable gas credit markets (Renewable Identification Number (“RIN”) and Low Carbon Fuel Standards (“LCFS”));
- experience in solar credit markets (Renewable Energy Credits (“RECs”)); and
- experience navigating the legislative and regulatory landscapes.
rDME is a complementary liquid gas that can be produced from multiple renewable feedstocks. A safe, cost-effective and clean-burning fuel, rDME is a viable sustainable addition to the energy mix. It has a low carbon footprint and can reduce emissions by up to 85% compared to fossil fuel alternatives. In both pure or blended form, rDME can help the de-fossilization of LPG by becoming a sustainable alternative for off-grid energy uses including heating, cooking and transport.
rDME is highly compatible with existing infrastructure and equipment. Therefore, with limited incremental investment, rDME can help to quickly transition the LPG industry to a more sustainable future.
Expansion of Renewable Liquefied Gas (“rLG”)2 Offering
- UGI International has agreement with Ekobenz for rLG supply.
- Enables UGI’s customers to decarbonize their operations to support the goals of the Paris climate accord to achieve net zero carbon emissions by 2050.
- Supports UGI International´s ambition of aligning and, where possible, surpassing those sustainable targets as set in the EU’s Renewable Energy Directive II (“RED II”) guidance protocol.
rLG and conventional LPG are chemically identical, but they are produced from different feedstocks.
- Drop-in: can be blended at any rate and still be used in existing infrastructure and appliances so distributors and consumers do not need to change or upgrade their equipment or appliances
- Renewable: made from a diverse mix of sustainable feedstocks and processes
- Low Carbon: the carbon footprint of rLG is up to 80% lower than that of conventional LPG, depending on the feedstock, and carries the same low nitrogen oxides (“NOx”), sulfur oxides (“SOx”), and particulate matter (“PM”) as conventional LPG
- Instant heat: provides on-demand heat and hot water compared to alternatives such as heat pumps
Investing in Adjacencies – Vertimass Agreement
- Utilizes Vertimass’ catalytic technology to produce renewable fuels from renewable-ethanol in the U.S. and Europe.
- Converts renewable ethanol into rLG and sustainable aviation fuel (“SAF”).
- This technology can be bolted on to existing ethanol production facilities, optimizing GHG emissions reduction, and bringing further end product diversification to the existing ethanol producer.
- Up to 50% of the total production capacity from the facilities can be rLG that will support UGI’s ongoing efforts to provide innovative, low-carbon, sustainable energy solutions to its customers.
Significance of SAF
SAF is a clean substitute for fossil jet fuels. Since SAF is drop-in fuel, it can be blended with fossil jet fuel and the blended fuel requires no special infrastructure or equipment changes.
Low-Carbon and Strategic Supply & Logistics Initiative
In February 2022, AmeriGas entered into an agreement with Global Clean Energy Holdings, Inc. (“GCEH”) to purchase and distribute renewable liquefied gas. AmeriGas will leverage its supply and logistics infrastructure and sales and marketing teams to market and distribute rLG to new and existing customers primarily in the state of California. rLG is chemically identical to today’s fossil LPG (C3H8) and, therefore, can be used with existing infrastructure. It has up to an 80% lower carbon footprint than that of conventional LPG and a much lower carbon intensity than conventional diesel or gasoline fuels.
As part of a multi-year agreement, GCEH’s Bakersfield bio-refinery will process up to 15,000 barrels of renewable feedstock per day, including their proprietary energy crop camelina, to produce renewable fuels including rLG. This bio-refinery is expected to begin operations in the Fall of 2022, and is projected to produce approximately 13 million gallons of rLG in its first year, making it the largest commercially available rLG production facility to date in the United States.
GCEH is a vertically-integrated renewable fuels company specializing in nonfood-based feedstocks used for the production of advanced biofuels and biomaterials. With a footprint that stretches from the laboratory to the farm gate to bio-refinery production, GCEH’s farm-to-fuels value chain integration provides access to reliable, ultra-low carbon feedstocks.
When online, the Bakersfield Biorefinery will be the only facility of its type, processing both traditional bio feedstocks as well as domestically grown camelina oil into sustainable, ultra-low carbon fuels in California.
What is Camelina
Camelina is a crop that can be planted on less productive land and in areas without sufficient rainfall to support other crops. By planting camelina, farmers are able to maximize the utility of this land without displacing acreage used for food production. Plants naturally absorb carbon dioxide as they grow. An additional benefit is that when camelina is used as a feedstock to produce renewable diesel it can significantly reduce greenhouse gas emissions.
A full business approach leveraging strategic partnerships, energy marketing experience, and regulatory progress
Renewable Natural Gas
RNG is pipeline-quality gas that is fully interchangeable with conventional natural gas and can be converted to compressed natural gas (“CNG”) or liquefied natural gas (“LNG”).
RNG is a biogas, meaning that it is produced from organic matter, such as manure and food waste, that has been processed to purity standards. The production of RNG requires the removal of impurities, such as carbon dioxide, hydrogen sulfide, oxygen, nitrogen and other gases to meet strict pipeline and utility quality standards.
Demand for RNG is growing worldwide due to increased awareness of environmental concerns and an interest in clean energy alternatives. RNG is
a low-carbon alternative to its fossil fuel counterpart.
In Fiscal 2021, UGI entered into a number of strategic RNG partnerships in Idaho, New York, Ohio, Kentucky, and South Dakota. These dairy farm, landfill, and food waste partnerships capture fugitive methane, which is the byproduct of waste decomposition, and prevent it from being released into the atmosphere.
Dairy Waste Feedstock Projects
RNG is produced by collecting manure at dairy farms and loading it into an anaerobic digester, which enables a biological process to releases biogas. The biogas is then cleaned and converted into pipeline quality gas and injected into a local or regional distribution system.
• RNG production of ~250 million cu. ft./year from on-site dairy waste feedstock
Cayuga (New York)
• RNG production of ~50 million cu. ft./year from on-site dairy waste feedstock
MBL Bioenergy (South Dakota)
• RNG production of ~650 million cu. ft./year from on-site dairy waste feedstock
Food Waste Projects
Hamilton (Ohio and Kentucky)
• Anaerobic digester project to produce RNG from food waste
• RNG production of ~250,000 MMBTUs (million BTUs)
UGI Utilities entered into the largest RNG supply interconnect agreement in the United States to date with Archaea Energy to accept delivery of RNG from the Keystone Landfill located in Dunmore, PA into its distribution system. When fully operational, the UGI Utilities system will be designed to take up to 16,000 mcf (thousand cubic feet) per day of RNG supply at a rate of up to 780 mcf per hour.
Energy Marketing Experience
In Fiscal 2020, UGI acquired GHI, a leading marketer in renewable natural gas. Adding GHI to UGI’s portfolio has provided UGI with a platform for growth in RNG projects and has created synergistic opportunities with GHI as the exclusive offtaker and marketer of the RNG for the Cayuga, Hamilton, and MBL Bioenergy RNG projects.
In Fiscal 2021, GHI marketed over 1.1 BCF of RNG.
UGI Receives Regulatory Approval for Renewable Natural Gas Pilot Project
On October 21, 2021, UGI Utilities received regulatory approval from the Pennsylvania Public Utility Commission (“PA PUC”) to purchase renewable natural gas as part of a five-year pilot program. The pilot program is the first of its kind in Pennsylvania and is intended to explore how UGI Utilities can integrate RNG into its supply portfolio to produce economic and environmental benefits for its Purchased Gas Cost (“PGC”) customers. The pilot allows UGI Utilities to test adding RNG to its supply portfolio while leveraging certain available economic incentives for renewables to lessen the cost impact of purchasing RNG for customers. UGI Utilities, a subsidiary of UGI Corporation, is the second largest regulated gas utility in Pennsylvania.
Environmental Energy Impact – Reducing Emissions
The incorporation of the RNG supply into UGI Utilities’ distribution system provides benefits to the Company and to the many communities it serves. In addition to securing a local source of gas for UGI Utilities customers, accepting the delivery of RNG for customer use reduces the release of naturally occurring methane. From an environmental perspective, accepting delivery of the RNG will reduce CO2 emissions that would otherwise occur by up to approximately 314,000 metric tons per year. This CO2 reduction equates to removing the emissions from more than 67,000 passenger vehicles over the course of a calendar year.
UGI’s RNG agreement with Archea Energy equates to removing the emissions of more than 67,000 cars over the course of a calendar year.
UGI remains committed to developing renewable energy sources for the communities we serve. The approval of this pilot program is a significant step forward as we continue to develop sustainable, environmentally responsible energy solutions for our customers.
- Global LPG is comprised of AmeriGas and UGI International businesses.
- There is not a fully agreed upon naming convention for low carbon or renewable LPG. We are referring to these molecules as “renewable liquefied gas” or “rLG” throughout the document, but will align our naming convention in the future with industry standards. Chemically speaking, renewable propane and bio-LPG have slightly different molecular compositions but as a fuel, they are the same.