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WHIPPANY, NEW JERSEY, 17 September 2020 | One of the three largest propane companies in the United States, Suburban Propane Partners (NYSE: SPH), today announced a deal to purchase a 39% stake in San Diego, California-based Oberon Fuels, the first producer of fuel-grade DME in North America. Suburban Propane has also committed to provide additional funding to support continued development efforts towards commercialization of a renewable DME ("rDME)/propane blended product. Suburban Propane will have the exclusive rights to work with Oberon Fuels to market and sell rDME and rDME/propane blends in the United States, Canada and Mexico.
“At Suburban Propane, we recognize the need to reduce the nation’s carbon footprint and improve overall air quality. The current clean-burning attributes of propane are a positive contributor to the goals of decarbonization, particularly when used as a replacement for gasoline and diesel in the transportation sector. Through our Go Green with Suburban Propane initiative, we are committed to the development of innovative solutions to further reduce the emissions profile of propane and to creating a pathway to zero carbon emissions,” said Michael Stivala, Suburban Propane President and Chief Executive Officer. “Our investment in Oberon Fuels is perfectly aligned with our strategic growth initiatives, and our commitment to being a pioneer in the transition to a sustainable energy future. We are very excited to partner with the team at Oberon Fuels to realize our joint vision of bringing DME technology together with propane to dramatically lower the carbon footprint.”
demonstration plant in California’s Imperial Valley is undergoing
upgrades now and will begin production of the first renewable DME in the
US in early 2021, with an estimated annual production capacity of 1.6 million gallons. The expansion is funded in part by a grant from the
California Energy Commission in an excellent example of public-private
partnership. The rDME, produced from pulp mill waste, will be blended
with propane for applications in transportation.
Traditional clean-burning propane can offer immediate opportunities to
reduce carbon emissions in the transportation sector compared to
gasoline and ultra-low sulfur diesel. With an estimated Carbon Intensity
(CI) value of -278 according to the California Air Resources Board, and handling and storage properties similar to those of propane, rDME presents an ideal blending agent that can reduce the carbon intensity of propane.
Under the United States Environmental Protection Agency’s Renewable Fuel
Standard, rDME is eligible for renewable identification number (“RIN”)
credits when produced from dairy biogas using the Oberon process.
“Suburban Propane is making a bold statement that innovative approaches can drive sustainability across the industry,” said Rebecca Boudreaux, Ph.D., Oberon Fuels President and Chief Executive Officer. “This is an opportunity for two molecules – DME and propane – to come together and provide the world with a cost-effective, clean-burning fuel that offers a pathway to carbon neutrality. We could not be happier to be working with Suburban Propane to bring this technology to the market and meet the increasing demands for lower emissions.”