July 29, 2015 3:10 PM, EDT

UPS Pledges to Buy 46 Million Gallons of Renewable Diesel

Andrew Harrer/Bloomberg News

UPS Inc. said it will buy 46 million gallons of renewable diesel over three years, 15 times greater than prior contracts, as the company seeks to further reduce carbon emissions.

In its statement, the package company said the move will enable it to buy more than 12% of ground fuel from alternative sources within two years and become “one of the largest users of renewable diesel in the world”.

The fuels will be supplied by Finland-based Neste, Iowa-based Renewable Energy Group and Solazym, located in San Francisco. The value of the contracts wasn’t disclosed.

“Advanced alternative fuels like renewable diesel are an important part of our strategy to reduce the carbon emissions impact of our fleet,” said Mark Wallace, UPS senior vice president of global engineering and sustainability. “We have used more than 3 million gallons of renewable diesel to date with positive results.”

The advantages cited by Wallace include a reduction of as much as 90% in greenhouse-gas emissions, good performance in cold weather and ease of use because no changes are needed in fueling systems. The renewable fuel has been used in Texas and Louisiana.

Fats, plant oils and waste are the feedstock for renewable diesel.

“UPS believes these agreements are especially important because they will help stimulate demand for investment in refinery technologies and sustainable feedstocks,” said Wallace, citing the potential for lower production costs.

The renewable fuels commitment by the company that ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers was announced on the same day UPS’ sustainability report was disclosed.

During 2014, the company increased its alternative fuel fleet by 61% over 2013.