Starting last fall, sustainability-minded Californians on the move could relocate their futons, boxes and bikes in a U-Haul truck powered by a novel clean fuel: not electricity and not biodiesel, but renewable propane.

The low-carbon fuel may be a surprise. But the program is part of a wider push to usher propane towards a low-carbon future, and extend its role as a hard-working stalwart of the U.S. energy system.

Long used as a fuel for heat and backup power, propane has in recent years played a growing role in reducing air pollution emissions, by displacing diesel in bus and truck fleets. Nationwide, more than 20,000 school buses have converted to propane.

Now, a confluence of factors is pushing propane to go greener, sooner. Consumers are growing more concerned about climate change. And policy is moving in the same direction.

In California, the US’ largest propane market, the Low Carbon Fuel Standard mandates a path towards greenhouse gas emissions reductions for the state’s tens of millions of vehicles; 13 other states may follow its lead. Absent a zero-carbon variant, conventional propane’s future could be limited in these markets.

Spurred by these developments, low- and zero-carbon formulations have gone from the lab into production. For end users, renewable propane promises an easy transition. Since it’s molecularly identical to conventional propane, the renewable version can be dropped into existing pipelines, tanks and equipment with no modification.

U-Haul’s push

U-Haul’s renewable initiative offers a glimpse at the road ahead. The nation’s largest propane retailer, U-Haul, rolled out the program in collaboration with Whippany (N.J.)-based Suburban Propane Partners, a nationwide distributor of propane.

Last October, the partners announced that 1 million gallons of renewable propane would be sold via U-Haul’s autogas propane stations across California. U-Haul is paying a premium for  renewable propane, but the company is absorbing the differential.

At a million gallons, U-Haul’s renewable propane pilot is a tiny fraction of overall propane sales. But it shows the climate impact such a shift can have. By displacing conventional propane, the program has the effect of eliminating 5 million tonnes of greenhouse gas emissions from the atmosphere, on par with removing 1,000 cars from the roads, according to the Western Propane Gas Association.[1]

“Carbon-neutral fuels are gaining momentum and we see this as an opportunity for propane,” said Dwight Farr, propane program manager at U-Haul.[2]

Scaling output

For now, commercial production of renewable propane in the U.S. is limited to a single plant, Renewable Energy Group (REG)’s biorefinery in Geismar, Louisiana. Renewable propane is produced as a byproduct of renewable diesel distilled from biological oils and fats — such as beef tallow, distillers corn oil, soy oil and used cooking oil.

Combining hydrogen with carbon from the oils and fats, a process known as hydrotreating, yields a mixture of hydrocarbons which can be distilled into renewable diesel and a mix of lighter products, including renewable propane.[3]

Production of renewable propane has been growing from a small base. In 2019, the US produced some 7.6 million gallons, according to Bloomberg NEF[4], a proverbial drop in the ocean of the 24.4 billion gallons of conventional propane produced that year.[5]

In a familiar chicken-and-egg challenge, slow demand growth may be limiting the development of additional renewable propane output. More renewable propane could be captured from renewable diesel refineries now operating. The WPGA estimates that 14 such plants produce renewable diesel across the US. But to date, only REG has upgraded operations to capture renewable propane. The rest burn the gas to fuel operations.

While U-Haul’s program is focusing on propane as a transport fuel, demand from other uses such as heating and backup generation could induce greater supply. With record-breaking heat sizzling much of the Western US, the risk of grid failures is rising both from generation shortfalls and wildfire grid damage.[6] At homes, hospitals and businesses, propane generators are widely used to provide emergency backup power.

Across California, some 600,000 households are not connected to the electric grid and rely on propane for power, heating, cooking and/or hot water, according to the Western Propane Gas Association (WPGA). Nationwide, some 11.9 million households use propane for either space or water heating, 5.8 million of which rely on propane as their primary fuel for space heating.[7]

Recent legislation could put renewable propane on equal footing with other low-carbon fuels in California. If passed, the bill would bring incentives for renewable propane into line with those in place for other renewable fuels

“By incentivizing production, California will be able to ensure these primarily rural communities have access to renewable energy and are able to participate in the state’s carbon reduction initiatives,” said Joy Alafia, president of WPGA.[8] “We see this as an issue of clean energy equity.”

Lower-carbon blends

Renewable propane isn’t carbon neutral yet, but innovation is unfolding on multiple fronts that could get to zero carbon and possibly below.

Today’s renewable propane — when made from biowaste, as in REG’s refinery — has a carbon intensity (CI) score — a standard used by California regulators that express a fuel’s ratio of carbon emissions per unit of energy — in the range of 20 to 30 grams of CO2e per megajoule of energy. That’s a big improvement relative to the CI of conventional propane (83), diesel (95) or gasoline (96) and rivals the carbon intensity of electric vehicles.[9]

Renewable dimethyl ether (rDME) is emerging as a promising complement to help further lower propane’s CI. Conventional DME is widely used today, best known as a nontoxic propellant in aerosol canisters of hairspray and bug repellent. With all the characteristics of propane, DME has also been blended with traditional propane as a cooking and heating fuel for years, particularly in Asia.

Recently, a renewable formulation of DME has emerged thanks to incentives in California to process biogas from organic waste. By synthesizing rDME from biogas captured from manure lagoons, farms avoid the release of substantial volumes of methane, a super-potent GHG, as well as carbon dioxide.

When derived from cow manure, rDME scores a carbon intensity value of -278, according to CARB. Thus, when blended into conventional propane (CI 83) at up to 20% volume, the blend yields an overall CI of around 35, said Rebecca Boudreaux, president and chief executive of Oberon Fuels.

In 2021, Oberon is scaling up production of rDME at a demonstration facility in California’s Imperial Valley. Suburban Propane Partners will hold exclusive rights to market and sell Oberon’s rDME and rDME-propane blends in North America.

rDME’s powerful negative impact on carbon intensity suggests a pathway to push renewable propane ‘s carbon impact lower yet. Combining rDME (CI -278) with renewable propane (CI around 25) could yield a carbon-negative blend, or a CI of less than zero, said Boudreaux.[10]

Next: Beyond zero?

Current methods to lower propane’s carbon intensity — renewable propane and rDME blends — could in time be joined by other, potentially lower-carbon production pathways. As the rest of the renewable fuels and renewable energy sector scales, additional zero-carbon inputs will become available.

For example, the world’s largest producer of renewable propane, Finland-based Neste, is exploring the promise of green hydrogen — created using renewable electricity to split water molecules — to hydrotreat renewable oils. Likewise, CO2 captured from the air or industrial smokestacks, could be added to the recipe, further driving down the fuel’s carbon intensity.

For now, neither green hydrogen nor captured carbon are widely available. But production of both is expected to scale quickly in Europe, the Middle East and the US over the next decade as these regions advance broader efforts to decarbonize.[11]

Ahead of any of these advances, there’s more capacity to produce renewable propane today. As demand for low-carbon fuels — such as diesel and jet fuel — rises, Alafia points out that renewable propane could benefit too. Practically the entire current fleet of renewable diesel plants could isolate and sell renewable propane.

If the incentives to sell renewable propane continue to rise, along with regulatory pressure, production volumes could scale quickly which could, in turn, lower prices.


[1] U-Haul. “Renewable Propane Arrives at U-Haul Autogas Locations in California.” 6 Oct. 2020, . Accessed 16 June 2021. /EN

[2] Via email interview.

[3] McCarthy, Joe. “Renewable Propane May Be the Key to the Industry’s Future – LP Gas.” LP Gas, 12 Nov. 2018, . Accessed 16 June 2021.

[4] Business Council for Sustainable Energy with BNEF “2021 Sustainable Energy in America Factbook.” BCSE, 15 Apr. 2021, PDF, page 59. Accessed 22 June 2021.


[6] “Sizzling Heat Wave Blankets U.S. Southwest for Third Day.” Reuters, 16 June 2021, . Accessed 17 June 2021.

[7] page 2

[8] McFadden, Carly. “WPGA Sponsors Renewable Propane Legislation.” LP Gas, 19 Apr. 2021, Accessed 14 June 2021.

[9] “Renewable Propane: The Near-Zero Solution.” ROUSH CleanTech, 15 Apr. 2021, Accessed 16 June 2021. /EN

[10] Via email interview.

[11] Via email interview.