Union Pacific spending over $100M on 20 battery-electric locomotives

Union Pacific plans to purchase 20 battery-electric locomotives, which the company says will result in the largest investment in battery-electric technology by a U.S. Class I railroad.

UP (NYSE: UNP) plans to spend more than $100 million to purchase the 20 locomotives and upgrade yard infrastructure. The railroad will test the locomotives in yard operations in California and Nebraska.

The railroad will acquire 10 locomotives from Wabtec (NYSE: WAB) and 10 from Progress Rail, a Caterpillar (NYSE: CAT) company.

The first locomotives will arrive in late 2023, with delivery of all the units completed by late 2024. UP will assess the locomotives’ performance and determine how to broaden their deployment as the railroad conducts tests at its yards.

UP will also be collaborating with community partners during this testing process. For instance, the Port of Los Angeles recently received a Diesel Emission Reduction Act grant from the U.S. Environmental Protection Agency, and the port has awarded UP a subaward that will partially cover the cost of one battery-electric locomotive, UP said Friday.

“Our work with the Port of Los Angeles will help us cut emissions in the South Coast Air Basin, which includes four counties in Southern California,” said Beth Whited, UP’s executive vice president and chief human resource officer, in a release. Whited oversees UP’s efforts to adhere to its environmental, social and governance objectives. “This work also will help our customers realize the benefit of moving goods by rail, reducing emissions by up to 75%.”

UP says that for every 10 battery-electric locomotives used, approximately 4,000 tons of carbon will be eliminated annually, which is the equivalent of removing 800 cars from the highway.

The purchases will not only help locomotive manufacturers develop and assess the locomotives’ potential deployment in long-haul service, but they will also help UP meet a goal of reducing Scope 1 and 2 GHG emissions by 26% by 2030 and achieve net-zero GHG emissions by 2050.

“We’re committed to actions that reduce Union Pacific’s environmental footprint as we work toward our ultimate goal of reaching net-zero emissions by 2050,” said UP President and CEO Lance Fritz. “These investments will contribute to further developing this important technology and providing industrywide benefits.”

Both Wabtec and Progress Rail said they looked forward to seeing their locomotives in service.

“As an industry leader, Union Pacific is pioneering a major application of battery power in its rail yards,” said Wabtec President and CEO Rafael Santana. Wabtec says the approximately 2.5-MWh locomotives are each powered by 7,000 battery cells. “Battery power is an ideal solution to reduce the environmental impact and costs of yard operations. “Using the FLXdrive in the rail yard can significantly improve local air quality, as well as reduce noise by up to 70% for neighboring communities.”

Said Caterpillar Chairman and CEO Jim Umpleby, “We are pleased to supply our EMD Joule locomotives to Union Pacific, representing our largest battery-electric locomotive order to date.” The locomotives will be manufactured in Muncie, Indiana, according to Progress Rail.

The Class I railroads have been pursuing alternative-powered locomotives as one way to reduce GHG emissions and promote ESG values within the company and among customers. BNSF (NYSE: BRK.B) has conducted testing of Wabtec’s FLXdrive locomotive, while CN (NYSE: CNI) has also purchased the FLXdrive locomotive and is also looking at renewable diesel with Progress Rail. Wabec, Carnegie Mellon and short line operator Genesee & Wyoming are also working together to advance the technology of battery-electric locomotives.

In addition to battery-electric locomotives, Class I railroads are exploring hydrogen-powered locomotives. BNSF is working with Progress Rail to demonstrate a hydrogen locomotive while Canadian Pacific (NYSE: CP) is planning to test three hydrogen locomotives. CP’s locomotive program received some funding from Emissions Reduction Alberta and Ballard Power Systems as the railroad expands its locomotive testing program. Ballard will have provided a total of 14 fuel cell modules, with each module having a rated power output of 200 kW.

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