Pennsylvania-based UGI International, a subsidiary of UGI Corporation, and SHV Energy announced Wednesday that they had received approval from the European Commission to create a joint venture to produce and use renewable dimethyl ether (rDME).
Dimethyl ether is a molecule that can range from being ultra-low carbon to carbon negative and can significantly reduce the carbon footprint of industries when used as an energy-dense, cost-effective means to move renewable hydrogen, as a blending agent for propane, or as a diesel replacement. Dimethyl ether has been used for decades as an environmentally safe, non-toxic aerosol propellant and as a blending agent with propane. It offers a 68 to 1010 percent reduction in Greenhouse Gases, and is approved as a renewable fuel under the U.S. Environmental Protection Agency’s Renewable Fuels Standard.
Intended to gain market acceptance and accelerate the use of rDME as a renewable solution for the LPG industry, the two parties will form the venture in early 2022. Both parties anticipate the joint venture will develop up to 6 production plants within the next five years, with a goal of producing 300,000 tons of rDME per year by 2027.
The aggregate investment in production capacity is estimated to be up to $1 billion and is expected to involve third-party investment.
UGI International is a leading LPG distributor, providing service to 615,000 end-users in 17 European countries. Its parent company, UGI Corporation, is a distributor and marketer of energy products and services, managing electric generation assets in Pennsylvania, providing natural gas and electric utilities in Pennsylvania and West Virginia, as well as managing midstream energy assets in Pennsylvania, Ohio, and West Virginia.