Case Study:
In addition to buildings and facilities, the city operates a large fleet of vehicles – from fire trucks & police cars to waste and water trucks and city buses - requiring in total about 9 M US gallons of fuel plus condensed natural gas (CNG). The City of Phoenix aims to become carbon-neutral by 2050 and to operate on 100% clean energy.
CUSTOMER:
INDUSTRY:
LOCATION:
CITY OF PHOENIX
MUNICIPAL
ARIZONA, USA
Revenue Generation with Renewable Fuel RIN Credits
Customer Overview
The city was blending regular fuel with ethanol and biodiesel for its fleet, and thus generating Renewable Identification Numbers (RINs) per the compliance system created by the US Environmental Protection Agency to track all biofuel production. For each gallon of blended biofuel one RIN credit could be sold to refineries and other “obligated parties” requiring these RINs for compliance. The city was not aware that the RINs they were generating could provide a source of revenue.
Challenge
World Kinect conducted an analysis of the city’s RIN-generating operations and of the general market situation to deliver expert guidance on how the RINs could add value to the city, on the best time to sell them, and to whom.
World Kinect Solution
For the City of Phoenix, World Kinect monitors the RIN market every day to alert on the best time to sell the RINs, at the best price.
World Kinect researches and locates the trading partners who can purchase the RINs.
The city has partnered with World Kinect to explore the best supply options for two alternative fuels - renewable diesel and renewable natural gas.
World Kinect also continues to supply CNG at competitive prices and to hedge it up to five years in advance to help ensure budget certainty.
The city has generated about $4.3M of total profit from selling RINs.
This new source of revenue was invested in replacement of aging fuel tanks and systems, alleviating budgetary pressures and improving reliability of the city’s fueling infrastructure.
One supplier to go to instead of multiple vendors since “the city of Phoenix does like to standardize the vendors or the contractors, streamlining the process and making things a lot easier”.
Business Impact
$4.3 MILLION GENERATED IN RIN PROFIT
ONE POINT OF CONTACT FOR FUEL, NATURAL
GAS, & SUSTAINABILITY
World Kinect for us - they're the subject matter experts. What we really rely on you more than anything else for is that really good expertise that you provide and the knowledge that you bring to help us make an informed decision. The RINs have been a great program for the city, and this is the revenue we didn't know we had before we partnered with World Kinect. Without World Kinect we would have a big loss in not only the revenue for our RINs, but we would be paying more for our natural gas.”
SCOTT CHANDLER, PUBLIC WORKS FLEET OPERATIONS MANAGER,
CITY OF PHOENIX, USA
Source energy
and fuel
Minimize price
and operational
risk
Reduce your
carbon
footprint
STREAMLIED PROCUREMENT
& INVOICING
The city's ethanol RINs generated the biggest profit, raising over $4.2 million in the last 10 years. The biodiesel RIN market is riskier due to frequent price fluctuations, and these RINs generated about $150K.