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California: a leader in low carbon fuels

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Hydrocarbon Engineering,


California's big oil disrupting climate change policies have been extended to 2030, and the state now leads the nation in low carbon fuel retail volumes with more than 14 million gal. of E85 Flex Fuel sold in 2015. This increase was led by Propel Fuels, the top retailer of low carbon fuels in the state. Propel's branded network of stations has created a new consumer category in the multi-billion dollar retail fuel industry, redefining customer loyalty and breaking the stronghold of big oil brands.

In a recently published consumer study, Propel reveals groundbreaking research into the everyday people adopting low carbon fuels in California. Published by Propel's Silicon Valley Workshop, Low Carbon Fuels in California: Motivators and Barriers to Use illustrates the surprising demographics of this user base, including millennials, the company's fastest growth segment. In addition to a growing, young customer base:

  • Low carbon fuel users are highly diverse, representing the socioeconomic demographics of California with strong Latino, African-American and Asian demographic groups.
  • Consumers are extremely loyal to low carbon fuels, choosing Propel branded fuels 90% of the time.
  • Because low carbon fuels are more affordable than petroleum to mainstream populations and can run in a variety of vehicles, middle and lower income families, as well as young people, can afford these cleaner energy options.

"Our research shows that low carbon fuels provide great value and appeal to a wide range of Californians, which is why Propel locations have the highest low carbon fuel volumes in the country, and well over double the volumes of other retailers in California," said Rob Elam, CEO of Propel Fuels.

Propel only retails low carbon fuels and has overcome the typical barriers impeding public access to alternatives. The company's unique business model offers established gas stations a new revenue stream by seamlessly adding the fuels with no cost to the station owner. Propel drives low carbon fuel volumes six times the national average through unparalleled innovation in customer experience, outreach and education; connecting mobile, social and location activities. Propel's customer base prioritises better value, higher performance and healthier communities while exhibiting loyalty rates matching that of America's strongest brands, including Starbucks and Trader Joe's.

In addition to value and performance, Flex Fuel E85 provides significant climate change benefit, as a gallon of Propel's California produced ethanol has 60% less greenhouse gas emissions than a gallon of California produced gasoline, according to the California Air Resources Board (CARB). And while Electric Vehicles get most of the attention, low carbon liquid fuels are responsible for 85% of the greenhouse gas reductions achieved by the California's Low Carbon Fuel Standard (LCFS) during the programme's first five years. Low carbon fuels also significantly reduce air toxins including NOX and particulate matter (PM), improving air quality in local communities.

"It is critical that California's carbon reduction policies are equitable, and not just benefitting the top five percent wealthiest Californians," continued Elam. "Political durability of these programmes only comes with broad based benefits. Low carbon liquid fuels are working for mainstream Californians today."

14.77 million gal. of E85 were sold in California in 2015, with Propel selling 9.3 million of those gallons – 63% of the market, according to recently released CARB data. Previously, ethanol production leaders Minnesota and Iowa led the nation; according to revenue records these states sold 13.1 million gal. each in 2015.

The study Low Carbon Fuels in California: Motivators and Barriers to Use explores customer motivations when choosing low carbon fuels, revealing the key consumer benefits and barriers to Flex Fuel E85. Designed in coordination with independent research firm LUX insights, Propel's study is the most comprehensive survey ever of the state's low carbon fuel customers and was conducted at the pump while customers filled up. More than 970 surveys were completed at 11 Propel locations in the San Francisco Bay Area, Sacramento, Los Angeles, Fresno, Inland Empire and San Diego.


Adapted from press release by Rosalie Starling

Read the article online at: https://www.hydrocarbonengineering.com/clean-fuels/16092016/california-leads-in-low-carbon-fuels-4091/


 

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