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.
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.
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.
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'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.
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”.
