To jump start its sustainability goals, Union Pacific (UP) has committed to reducing absolute greenhouse gas (GHG) emissions 50.4% by 2030 from a 2018 base year from Scope 1, Scope 2 and Scope 3 sources, including purchased goods and services (Scope 3, category 1), capital goods (Scope 3, category 2), and fuel- and energy-related activities (Scope 3, category 3). Increasing locomotive fuel efficiency, investing in locomotive overhauls, and boosting train length will help UP meet this target, but they are not enough, according to the railroad. In the near term, it will be key to expand the use of biofuels—renewable diesel and biodiesel—in locomotives since 94% of the railroad’s direct (Scope 1 and Scope 2) emissions are generated from fuel usage in rail operations. Developing and testing alternative propulsion units will be important for the long term.
UP, BY THE NUMBERS:
• 32,623 route-mile network spanning 23 states.
• Owns approximately 7,000 locomotives.
• Purchases more than 900 million gallons of diesel fuel per year.
• Fuel consumption for operations: 1.088 gallons per GTM (gross ton-mile) in 2023, down 5.4% from 1.150 gallons per GTM in 2018 (baseline).
“Biofuels, generally, reduce our carbon footprint by more than 79% compared to a traditional diesel,” UP Executive Vice President Operations Eric Gehringer tells Railway Age. That’s why UP has been growing biofuel usage. In 2018, it represented 1.2% of total fuel consumption and in 2023, 6.1%. The railroad’s goal is to increase that percentage to 10% by 2025 and to 20% by 2030, reducing both GHG and criteria pollutant emissions (PM, NOx, etc.). “We have a tremendous amount of optimism for where we can go with renewable and biodiesel,” Gehringer says.
Renewable Diesel vs. Biodiesel
Biofuel is a general term for all fuels made from components other than petroleum-derived products, including animal wastes, landfill gases and industrial wastes, according to UP. Among the types produced in the United States: biodiesel, renewable diesel and sustainable aviation fuel.
Renewable diesel and biodiesel are both made from renewable resources like soybean oil, animal proteins and used cooking oil—UP doesn’t have “a strong opinion” on which of these feedstocks work best, Gehringer says—but they’re manufactured differently. Renewable diesel is produced through thermochemical processes such as hydrotreating, gasification and pyrolysis; biodiesel through transesterification.
Because renewable diesel is chemically equivalent to petroleum diesel, it can be used in existing diesel engines, pipelines and storage tanks, without modifications. For example, it can be used in diesel engines in its pure form (R100) or blended with petroleum diesel or biodiesel in various ratios, such as R20 (a blend of 20% renewable diesel and 80% petroleum diesel) and R5 (5% renewable diesel and 95% petroleum diesel), according to the U.S. Energy Information Administration (USEIA). In contrast, biodiesel must be blended with renewable diesel or petroleum diesel for use in existing diesel engines.
Another difference: “Biodiesel absorbs water and can promote biological growth that must be treated, whereas renewable diesel does not,” UP reports. Additionally, biodiesel increases NOx emissions but at the same time reduces CO2, whereas renewable diesel reduces NOx, PM and CO2.
Both fuels, however, “may have poor cold weather properties and reduced energy density,” according to UP, which explains that reduced energy density translates into reduced fuel mileage. The U.S. Department of Energy (USDOE) explains that biodiesel performance in cold weather depends on the blend of biodiesel, the feedstock and the petroleum diesel characteristics. “In general, blends with smaller percentages of biodiesel perform better in cold temperatures,” USDOE says. “Typically, No. 2 diesel and B5 (up to 5% biodiesel) perform about the same in cold weather.”
“Biofuels, generally, reduce our carbon footprint by more than 79% compared to a traditional diesel.”
— UP Executive Vice President Operations Eric Gehringer
Just how much biofuel can railroads use in their locomotive engines? According to Gehringer, locomotive OEMs Wabtec Corporation and Progress Rail, a Caterpillar Company, have certified the use of blends up to 50% for renewable diesel and 11% for biodiesel. The railroad is working with them and other railroads through the AAR Decarbonization Working Group to test and approve even higher blends.
“Field testing is crucial in determining how biofuels will perform in real operating environments and impact locomotive components,” according to a Wabtec report. “Will biodiesel cause engine leaks or corrosion? What will happen to engine performance at high altitudes, high ambient temperatures, or subfreezing weather? Will maintenance intervals change?”
Testing Under Way
UP is currently collaborating with Wabtec and CN on biofuel testing. UP began operating locomotives on 100% biofuel in second-quarter 2022. Four Wabtec FDLs using Chevron-Renewable Energy Group’s UltraClean BlenD™—a B20/R80 blend (20% biodiesel and 80% renewable diesel)—are running in California between UP’s West Colton rail yard in Bloomington and a sand and gravel mine in San Bernardino. All four units were put through a series of baseline tests at Wabtec’s design and development hub in Erie, Pa., before making the trip to California. Approximately every six months, one locomotive is sent back to Erie for evaluation. The aim of the pilot test is to determine if locomotive performance and reliability is comparable whether operated with biofuel or traditional, petroleum-based diesel fuel. So far, they are. UP is not experiencing any degradation in locomotive performance, according to Gehringer, who notes that for customers, “that’s the most important thing we could be delivering” in addition to GHG emissions reductions. Testing will also help the railroad to understand how biofuel impacts fuel efficiency and potentially validates its estimates for GHG and particulate matter emissions reductions overall.
“The ultimate measure is what we call MMBF, which is mean miles between failure,” Gehringer tells Railway Age. “And what we want to make sure is that while we’re using this new fuel source, we’re not just maintaining, but we’re improving our reliability. What that would mean is increasing our MMBFs. If you go deeper into the locomotive itself, the primary indicator is our filter conditions. Are you getting any kind of degradation in the quality of or the condition of your filter? And then, just broadly speaking, you’re looking at the rest of the engine components themselves.”
Gehringer says that the railroad will have results by the end of this year. Testing, however, is slated to continue through the end of 2025.
UP in spring 2023 teamed with CN to test biofuel, as both railroads are committed to science-based targets of reducing GHG emissions by 2030, according to UP. UP is also committed to setting a 2050 net-zero emissions target; CN’s target was approved in June 2024. At MxV Rail in Pueblo, Colo., two classes of Wabtec locomotives recently finished 24/7 stationary testing, which essentially consolidated years of over-the-road testing. UP’s Wabtec C44ACM with an FDL Advantage engine was operating on R99 and CN’s Wabtec C44 with an FDL engine on B20/R80. Wabtec is currently reviewing and analyzing the results. Like UP’s California test, the goal was to determine the impact of biofuel on engine reliability. Also being considered: how temperature impacts fuel performance. According to Gehringer, there had been no degradation in locomotive performance.
For both the California and Colorado tests, UP is not seeing locomotive power or efficiency being sacrificed using biofuel, reports Gehringer; he notes that “if we do, it’s just a minor amount.” Does the Class I see a difference in terms of blends? “We’ll know that better once we finish these two tests,” he tells Railway Age.
UP’s Biofuel Future
UP reports that it is working with “fuel supply-chain partners to secure supplies of low-carbon fuels to meet our current and projected future needs.” This includes “creating logistics solutions to enable the refueling of locomotives with biofuel blends at new locations on our network (the railroad has 30 primary fueling locations); establishing commercial contracts for biodiesel with our suppliers; exploring market-based ways to reduce the cost premium for biofuels over fossil fuel-based diesel; and making cooperative efforts to encourage efficient, circular shipping of biofuels and biofuel feedstocks by rail.”
According to the railroad, government and regulatory action is necessary to encourage the supply of biodiesel and renewable diesel. One federal program that does so is the Renewable Fuel Standard (RFS), which requires transportation fuel sold in the U.S. to contain a minimum volume of renewable fuels, which include renewable diesel and biodiesel.
The only states with active clean fuel programs that incentivize the consumption of renewable diesel beyond the incentives provided by federal policies are California, Oregon, and Washington, reports the USEIA. Because of this, it says, renewable diesel is primarily consumed on the West Coast. Hawaii, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York and Vermont are considering such programs. Out of the 23 states in which UP operates, California and Illinois are among the top five for business handled, Gehringer tells Railway Age, and the railroad is partnering with both since “they want to continue to reduce their environmental impact.”
According to UP, the production and distribution of biodiesel and renewable diesel can “present challenges in terms of cost and supply, hindering their broader adoption in our operations.” That’s one reason it collaborates with industry and fuel suppliers “to advocate for mode-neutral programs that promote fair market access to biofuels, including renewables, and their feedstocks across different transportation modes and consumers.” In June 2024, UP was the first railroad to join Clean Fuels Alliance America, a national trade association for producers, marketers and users of biodiesel, renewable diesel and sustainable aviation fuel.
Harnessing Opportunity
As the rail, aviation and marine (river barge) industries continue to increase their biofuel use, UP sees opportunity. The railroad is looking to boost biofuel shipments, as well as shipments of the feedstocks that comprise them. According to Gehringer, over the past four years or so, biofuel has become a “considerable growth engine.”
“We have an opportunity to grow carload volumes of renewable energy, including biofuels,” UP reports. “We provide value to renewable fuels producers by transporting low-carbon fuels to the West Coast, where demand is the highest and producers can benefit from state and federal incentives … Compared to shipping by truck, we can reduce our customers’ logistics carbon footprint and simultaneously provide cost savings on their shipments by delivering feedstocks to biofuels refineries and then transporting renewable fuels to consumption markets. States with high demand for biofuels, such as California and Texas, are on our network. In 2023, our revenue from renewable diesel fuel shipments has grown 250% since 2020, and renewable fuels use is expected to grow sharply over the short term as some traditional fuel producers make large investments in petroleum refineries to switch to renewable diesel. It is estimated that U.S. renewable diesel production capacity will total 4.8 billion gallons per year by the end of 2024, compared to nearly 2.6 billion gallons of production capacity in 2022.” (See below.)
The USEIA in April 2024 released a report showing that the movement of renewable diesel by rail is growing. From early 2022 to late 2023, it said, rail movements increased about 50%—“likely due to strong growth in renewable diesel production during that period.” For renewable diesel transport for January 2022-January 2024, “we estimate that virtually all of it went to the West Coast,” USEIA reported. “The West Coast receives renewable diesel rail shipments from the Gulf Coast, Midwest and Rocky Mountains. The largest volume comes from the Gulf Coast, which sends more renewable diesel by rail than other regions because of its significant production capacity. This production capacity supports the movement of significant volumes of renewable diesel by both rail and water. … Renewable diesel rail movements are significantly lower than those for fuel ethanol but higher than those for biodiesel. Fuel ethanol rail movements are the highest among any biofuel because it is the most consumed, and it is primarily moved by rail because its chemical properties make it unsuitable for transportation in pipelines. Biodiesel rail movements are lower than those for renewable diesel primarily because less biodiesel is consumed.”
USEIA: U.S. Biofuel Production Capacity
“In January 2023, U.S. production capacity of renewable diesel and other biofuels reached 3 billion gallons per year, surpassing U.S. biodiesel production capacity for the first time,” according to a September 2023 report from the U.S. Energy Information Administration (USEIA). “Rising targets for state and federal renewable fuel programs and the renewal of biomass-based diesel tax credits are driving this growth in U.S. renewable diesel capacity,” the agency noted.
USEIA began collecting data on U.S. capacity of renewable diesel and other biofuels in 2021. Since that time, the agency said, “production capacity has more than tripled in the United States,” and over the same period, “biodiesel capacity has declined 13%.
“Nationwide, overall biofuels production capacity—which includes renewable diesel, biodiesel, ethanol, and other biofuels—reached 23 billion gallons per year (gal/y) in January 2023, a 6% increase in total production capacity from January 2022. Fuel ethanol accounted for 78% of U.S. biofuel production capacity, renewable diesel and other biofuels accounted for 13%, and biodiesel accounted for 9%.
“Between January 2022 and January 2023, the U.S. production capacity for producing renewable diesel and other biofuels increased by 1.25 billion gallons per year, a 71% increase from 2022. In January 2023, 11 states reported sites with renewable diesel and other biofuels production capacity, up from 6 states in 2022. An example of a state with new and growing capacity is Texas, which had no renewable diesel and other biofuels capacity in January 2022. By January 2023, Texas had 537 million gal/y of capacity, the second highest after Louisiana. Unlike ethanol and biodiesel, where states in the Midwest hold most of the national capacity, more than 60% of U.S. renewable diesel, and other biofuels production capacity is on the Gulf Coast.
“Biodiesel now accounts for the smallest share of U.S. biofuels capacity, 2.1 billion gal/y in January 2023, among the three categories we track. Biodiesel capacity declined by 169 million gal/y from January 2022 to January 2023. The Midwest has 70% of U.S biodiesel capacity, which is primarily in Iowa, Missouri, Illinois, and Indiana.
“Fuel ethanol producers in the Midwest continue to hold the most capacity in the U.S. biofuels market. Fuel ethanol capacity increased by 283 million gal/y between 2022 and 2023. More than 90% of U.S. ethanol capacity is in the Midwest, where the feedstocks for ethanol (primarily, corn) are grown, mainly in Iowa, Nebraska, Illinois, and South Dakota.”
