CNG conversion project aims to cut fuel costs while reducing emissions

United Parcel Service (UPS) Canada has converted 25 delivery vans in its London, Ontario fleet to run on compressed natural gas (CNG), a lower-carbon fuel solution that can reduce emissions by up to 20 per cent compared to gasoline or diesel — while reducing fuel costs by up to 40 per cent.

A multi-year deal with Enbridge Gas and Clean Energy Fuels Corp. announced in February will make two million litres of CNG available to the UPS vans at a Clean Energy-operated CNG fuelling station near UPS’s London facility. Clean Energy reckons the move will reduce greenhouse gas emissions by 700 tonnes — the equivalent of planting 11,667 trees, removing 152 cars from the road, and recycling 281 tonnes of landfill waste. Moreover, CNG produces lower levels of nitrogen oxide and volatile organic compounds than other fuel sources.

“A multi-year deal with Enbridge Gas and Clean Energy Fuels Corp. announced in February will make two million litres of CNG available to the UPS vans at a Clean Energy-operated CNG fuelling station near UPS’s London facility.”

The London station is one of three CNG fuelling stations along Ontario’s Highway 401 corridor partnered by Clean Energy and Enbridge serving truck fleets along one of the most heavily trafficked truck routes in North America. The three stations provide up to 75 per cent route coverage in Ontario.

UPS has been operating in Canada since 1975. Since then, it has grown to 13,000 employees from coast to coast. Delivery fleet numbers are over 3,000 — package cars, tractors, trailers and shifters — of which more than 41 per cent run on alternative fuels.

“UPS is continually looking to make sustainable improvements to our business,” says Tara Redmond, Vice President of Building and Systems Engineering and Sustainability Chair. “Globally, our goal is for 40 per cent alternative fuel in ground operations by 2025. This investment is just one step in getting us there.”

“UPS is committed to achieving its sustainability goals — 40 per cent alternative fuel in ground operations and 25 per cent renewable electricity in our facilities — by 2025,” says Redmond. “And by 2035 our goal is for 50 per cent reduction in CO2 per global small package, from a 2020 baseline. We’re constantly challenging ourselves to find new and innovative technologies to run our business sustainably. The investment in London is the second location for UPS to implement CNG vehicles in Canada, the first being Richmond, BC, where we have both CNG package delivery vehicles and tractors. We will continue to evaluate opportunities in the future.”

“CNG produces lower levels of nitrogen oxide and volatile organic compounds than other fuel sources.”

That future could potentially include RNG (Renewable Natural Gas). “RNG is under consideration,” says Redmond, but “our ability to use RNG is impacted by its availability and accessibility.”

RNG yields up to a 90 per cent reduction in lifecycle greenhouse gas emissions when compared to conventional diesel. So it makes good sense: produced naturally from biological sources such as landfills and dairy farms, it turns organic waste and garbage into clean fuel — a winning solution overall. Its molecular structure is identical to conventional natural gas. But full-scale RNG projects require sizeable upfront investments and therefore generally need large upfront off-take agreements.

However, worldwide, RNG figures largely on UPS’s radar. They recently committed to purchase more than 250 million gallon equivalents of it over the next several years, making it the largest RNG consumer in the transportation industry.

The Ottawa-based Canadian Natural Gas Vehicle Alliance (CNGVA), an organization that advocates on behalf of Canada’s natural gas vehicle industry, fully endorses the UPS Canada move. “The UPS initiative is part of CNGVA’s Ontario market development project,” says Bruce Winchester, CNGVA’s Executive Director. “The UPS project was specifically aimed at supporting a fleet deployment in the package and delivery market segment in Ontario. This segment of the transportation market is characterized by a type of fleet that makes regular deliveries through depot hubs and destination spokes.”

It’s a good choice: the use pattern in these fleet types allows for longer term investments in new technologies and compelling returns on investment. “In partnering with UPS for this fleet deployment we are working with a recognized brand in this market segment — the distinct brown package cars used by UPS are iconic,” says Winchester. “UPS has made significant global investments in deploying alternative fuel options to support emissions reductions objectives — supporting a significant CNG fleet in the US — and is now expanding its alternative fuel fleet in Canada. In supporting the first Canadian alternative fuel fleet outside British Columbia we are expanding opportunities for greater use of CNG. Most importantly we are showcasing UPS as a leader in emissions reductions.”

So clearly such investments serve to make the business case while at the same time make a robust environmental case. “A strong business case is always important,” says Winchester. “But these vehicles are also reducing the emissions impact — 700 tonnes fewer emissions in London, thanks to UPS. Over the next few years we anticipate UPS will deploy more natural gas vehicles.” Indeed, UPS recently announced global plans to purchase more than 6,000 CNG-powered trucks. This commitment represents a $450 million investment in expanding the company’s alternative fuel and advanced technology vehicle fleet.

And RNG is making headway in Canada. The City of Toronto’s refuse collection fleet has demonstrated leadership in combining its organic waste collection with a project to produce RNG. It was a first in Canada. Also, the City of Hamilton has launched Ontario’s first carbon-negative transit bus. While other transit fleets are deploying near-zero emissions battery electric transit buses, Hamilton has gone one better: a net-zero advantage with a 60-foot transit bus that runs on RNG. The project has been so successful they’ll continue operating it for another year.

Initiatives like these are key to building awareness and interest in alternative fuels. And they make strong cases for CNG and RNG. “These demonstration projects will go a long way to convince others to follow,” says Winchester. “Leading fleets like UPS, City of Toronto Waste, and Hamilton Street Railway are showing the way for others to follow. CNGVA anticipates that many more will switch to natural gas and that we will all benefit from lower emissions in the future.”

Graham Chandler spent a decade in energy corporate finance and marketing management. As a full-time freelance writer, he has specialized in energy topics for the past 20 years.